In the last 3 years, millions of Nigerians are downloading instant loan apps to make ends meet, and have been having a good time. The process is easy and the loan is instant. The applicant’s financial history usually determines the amount of loan one could qualify for. These loans are usually received to sort basic needs as stated in the options of these apps. For two years or more, Nigerians enjoyed these apps as it saved a lot when the need is pressing.
However, in the last one year or less, the rate at which Nigerians subscribe and apply for the loan on these apps have drastically reduced. Most Nigerians rather face their deadliest crisis financially than apply for any form of a loan.
City People took to the streets and to confirm from users and ascertain the true picture of things and here are our findings; Funsho Adedeji, 32, and a sim registration staff in Ikeja shared his experience with City People and why he will not apply for any loan from any app anymore. He said:
The only person I could lie to about the texts were my mother. To those close to me, like my fiancé, friends, former schoolmates, and work colleagues, I explained what was going on. To more distant contacts, including annoying relatives, I said nothing.
My mother probably knew I was lying — mothers often do — but she let it slide. “I couldn’t tell her the truth,” Funso said. “So I told her it was one of those prison scams and she should ignore it.” I owed money. Not a lot of it, but that didn’t matter. My fintech creditor was still telling everyone in my inner circle that I was a deadbeat.
It happened like this: Toward the end of March 2020, I found myself in a bind. At 32, I earned a solid income as a customer service operator with the defunct Etisalat. But for the first time in my life, I couldn’t make rent.
My choices were limited. I could always borrow the remainder from friends, family, or somebody else in my network. The problem was that if I did, people would believe I was living beyond my means.
But then one morning I logged into my Facebook account and saw an ad for a Fintech app called O’Kash that promised to be the discreet friend who would spot him some cash and never mention it again. Offering the ability to “process loans in seconds,” All I needed to do was download the app, enter my financial details, and let the algorithm generate a credit rating. I would get the money I needed and could pay it back once I was liquid.
It took just minutes to apply for my loan. The money arrived right away, so I paid my bills and moved on. “I started with about N7,000, which I repaid [on time], and my loan limit expanded. Then I borrowed about N14,000, which I also repaid,” he told citypeople It was the third loan that upended my life. I needed it to top my his rent, because by then a vicious cycle had begun, wherein I would pay off my loan then borrow again to fill the hole that the last payment had left in his finances. I started getting calls even before that deadline passed.
“Will you repay your OKash loan?” I remember a caller asking me, before warning that if I missed a payment, the company would notify everyone on my contact list.
In texts, he showed City People on his phone, a representative had written an hour before the deadline lapsed, “Despite several polite reminders on your OKash loan . . . No PAYMENT received yet . . . Note that we are going to invade your privacy according to the Terms of Service, IF NOT CLEARED BY 4 PM.” The clause in question reads as follows: “In the event we cannot get in contact with you or your emergency contact, you also expressly authorise us to contact any and all persons in your contact list.”
In the days after the deadline, debt collectors hounded Funsho, calling three to four times every hour. They also cast a wide net. “They texted just about everyone I know,” Funsho says. His parents and many friends got messages. One of his colleagues even shared a screenshot of a text from OKash in an office-wide WhatsApp Group.
“Some [people] sympathized with me, Some were laughing at me and some were actually very annoyed that OKash is exposing and shaming me . . . Even my boss called me to ask if everything is okay.”
This was nearly two years ago, but the memory is still raw, so much so that Funsho asked to use a pseudonym for this article. “If you pay on time, they are angels. “They keep texting you to take out another loan with them. If you do and won’t or can’t pay, then it’s pretty simple: Pay or we damage what you value most.”
Bukola Kunle, a 35-year-old teacher also shared her experience with Fairmoney and how she was harassed by a female representative for not delaying payment for a day.
She stated, “I was supposed to make payment after 2 weeks and when it was a day to refunding my debt, my phone screen went blind and I had to fix it at the computer village. I put my sim into a USSD phone and once I got a call, it was a Fairmoney staff screaming at me and calling me a debtor. I even tried to calm her down and requested that she furnishes me with the USSD mode of payment but she was too angry to listen. By the time I fixed my phone, Fairmoney has left an avalanche of text messages on my phone calling me names. I have stopped borrowing from them. Access Bank gives all its customer loan options and they deduct when the time is right, conveniently.” She narrated.
One other reason most people stopped using loan app is based on the security of their information. A cybercrime suspect recently shared his mode of stealing from people’s account, once he lays his hand on a stolen phone. He tries to use the bank app and once he finds out there is no money on the account, he would borrow money with his phone app and the phone owner will be in debt. The video went viral and scared many prospective loan applicant off.
A lot of fraudulent activities have also been happening in virtually all fintech institutions without the consent of account owners. Many must have been wondering how the fraudsters get their data to scam or hack their accounts.
The new method used by fraudsters to blackmail innocent people in Nigeria now is to develop an app under the guise of giving out loans to people in other to obtain their data and later use it against them.
These and more constituted to why most Nigerians stopped applying for loans online.
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