Succour. This is what the Federal Government through the Central Bank of Nigeria (CBN) and the Federal Competition and Consumer Protection Council (FCCPC) intended for ordinary Nigerians when it gave the nod to some fintech firms to assist the people with loans.
But today, pains, sufferings, gnashing of teeth, regrets, sicknesses and, at times, death, among others, are what the callous “loan sharks”, both legal and illegal, operating in our digital space are giving ordinary Nigerians who patronise them for their businesses and other purposes.
The National Assembly, the CBN, FCCPC and the Economic and Financial Crimes Commission (EFCC) must not look away, while these wicked characters, parading themselves as online loan apps operators, are smiling to the bank.
Loans are supposed to be used as a leverage to grow the economy. But the loan apps came in and turned them into money-making ventures through which they heartlessly extort helpless and vulnerable Nigerians who patronise them.
Even those the CBN licensed and the FCCPC registered to operate legally have joined the hundreds of illegal ones to add to the sufferings of the people. Some of them use their apps to launder money!
According to FCCPC, as of late last year, the total number of registered digital lenders was 492. While 457 have “full approval”, many more are for “conditional approval”.
Meanwhile, over 100 illegal or unregistered ones are on the watchlist of FCCPC, facing potential ban, fines or delisting. A fine of N100 million awaits anyone that is not registered, says FCCPC. All these are good to hear. However, since the business of digital lending appears to be very lucrative, all kinds of fraudsters, scammers, Yahoo boys, drug barons, money launderers and other shady characters have invaded the digital space with illegal loan apps to fleece Nigerians and destroy the intended aim of the government.
Some of these apps are owned by foreigners, especially Chinese, in collaboration with their dubious Nigerian counterparts.
Yes, millions of Nigerians can not be assisted by the conventional lenders who ask for all manner of collateral that they do not have. Many of these Nigerians have no option than to patronise the pretentious “loan sharks” who create the impression of helping the people but are actually duping them.
Almost all of them, both registered and unregistered, charge interests between 40 and 70 per cent, and their loans must be paid back between five and eight days!
They also charge overdue rates of between three and five per cent daily. This is against the CBN policy on lending.
These outrageous interest and overdue rates have pushed many Nigerians to the wall. Digital lenders are the present day colonial masters who derive joy in stealing from many helpless Nigerians to finance their flamboyant lifestyle.
Besides higher interest rates, the modus operandi of all the digital lenders, both legal and illegal, when recovering their loans are the same. This includes bombarding an average borrower with up to 100 calls with different phone numbers daily; sending threat SMS; calling a borrower’s contacts, other than the emergency contacts; announcing the obituary of a borrower with his or her picture on social media platforms; defaming and blackmailing borrowers on social media by labelling them scammers, fraudsters, armed robbers, ritualists and prostitutes, among others; cursing borrowers profusely via phone calls, SMS and emails; sending threatening messages to his or her family members; stealing money through auto debit from borrowers’ accounts and perpetrating all sorts of illegalities, just to create fear in the mind of borrowers.
Although all these tactics contradict the provisions of CBN law on debt recovery, the digital lenders do no give a damn and continue to dare the apex bank and the FCCPC! But, should this continue without a check?
Nobody is advocating for non-payment of loans legitimately obtained. But a situation where a digital lender charges outrageous interest rates and penalty for daily default after presenting a one-sided agreement to the desperate borrower is unacceptable. In no saner society do lenders do this to the citizens and get away with it.
Licensing and registering these loan apps should not be the only things the CBN and the FCCPC would do and stop. The two regulators, and the EFCC, must wake up to their responsibility by sanitising, controlling and closely monitoring the digital lending space to weed out the “loan sharks”. Many Nigerians are silently dying under the heavy yoke of digital lenders. Some have lost their businesses and personal property just to pay the loans that keep increasing daily.
Members of the National Assembly must also intervene on behalf of millions of their constituents who are victims of the digital lenders’ viciousness. Nigerians need protection from the government.
For the information of the lawmakers, the CBN, FCCPC and EFCC, many Nigerians who are the victims of these aggressive and killing loan recovery tactics are already massing under different groups on social media to fight for their rights. The regulatory authorities must not wait for this issue to spiral out of hand and become a national and social crisis before they intervene. A stitch in time, they say, saves nine.
*Omolale is a Lagos-based journalist.
