Illegal loan apps ignore Nigerian cyber laws and continue to shame customers


While Nigerians have been quick to embrace digital loan apps, their interest is at exorbitant rates.

Lending apps listed on the Google Play Store offering short-term loans are mandated by Google policy rules to give borrowers at least 60 days from the date of issuance to repay any loan.

The three loan apps owned by Rock Financials claim to give users at least 60 days to repay their loans. In reality, app users are offered a week to repay their loans according to Google’s policy rules.

According to its announcement on the Play Store, Rock Financials Limited charges a maximum interest rate of 18%.

Yet the company’s claim is flat out false. CIRI found that they were charging between 40% and 100% interest. Late borrowers are

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This deception misleads customers who download its lending apps from play store.

On the Google Play Store, a victim, who identified himself as Olatokunbo Folayan, commented on AngelLoan. He took out a loan of 26,500 Naira and was asked to pay 37,500 Naira in seven days.

“I will not advise anyone to (take their loans), Play Store should verify all authorized people on their platform, the government should ban such an app,” he said.

The interest rate charged to Folayan on his loan was 42%. If charged at the daily interest rate of 0.05% advertised on the Play Store, Folayan would have paid a total of N26,592 instead of N37,500.

Another user, Mohammed Idayat, borrowed N30,000 from AngelLoan and paid N44,000 including interest a week later. He was charged with 47 percent interest.

“If a customer is unable to pay sooner (AngelLoan), he abuses and rains down curses as if he were God. I will not advise anyone to go for this loan app if you don’t want to be broke,” he said.

Some loan apps offer users false information about their interest rates and loan repayment plan, thus violating Google Play Store policy.

Surveys by CIRI reveal that LCredit, 9credit, LionCash, Nkash, ForNaira, CycleCash, Cashrain, Mikoloan, Supercash, Xcredit, ICoin, PalmCredit and CashLion are loan companies involved in the deception scheme.

The interest rate on an average commercial bank loan in Nigeria is 24% per annum. However, loan application interest rates are between 75% and 395% per annum.

Research by Hinderberg indicates that OPay, a lending app in Nigeria, falsely claims to grant a maximum interest rate of 24% on each loan, but charges borrowers 438% interest. Late borrowers pay up to 876%.

Despite their disregard of Nigerian financial laws and Google Play Developer Policy, by lying to customers about their repayment term and interest rates, they are still operating on the Google app.

Elijah Lawal, head of global communications and public affairs at Google. Credit:

In January, Google removed more than 30 loan apps in India from its Play Store for failing to prove compliance with local financial laws.

CIRI reached out to Google’s head of communications and public affairs, Elijah Lawal, on his social media to explain why Google has yet to crack down on lending apps in Nigeria, violating Google Play development policies.

At the time of filing this report, he had yet to respond.

Debt Shame Business

Loan applications in Nigeria are mostly unregulated as debt collectors exploit unconventional techniques to shame defaulting borrowers into recovering their loans.

Tobilola, who did not reveal his last name for fear of reprisals, is an LCredit debt collector and one of the few people with direct knowledge of their operations.

It is a nightmare for defaulting lenders. His job is to call the friends and family of defaulters, employing unorthodox means to ensure they repay their loans.

There is no official figure on the number of loan companies in Nigeria; however, debt collection is an essential part of their operations.

Talk to ICIR, a debt collector at LCredit owned by a Chinese company, Cashigo International, revealed that he had divided his debt collectors into five teams.

Teams are led by a team leader who assigns clients to debt collectors based on how long they have defaulted on their loans.

“We are divided into five groups. Most debt collectors prefer first to third shift because they focus on short-term delinquent loans, which are easier to collect than long-term loans.

“We’re assigned 400 customers a week to each collection agent in the call center, and they don’t care what you do to collect delinquent loans from customers,” he said.

Agents receive a weekly bonus of three percent of the total amount they collect if they reach their weekly goal.

The monthly salary of a debt collection agent at LCredit is N50,000, while the top three performers of the week receive between N10,000 and N15,000 as an incentive.

Femi said CIRI that customers who defaulted on their loans often asked for more time to escape the constant harassment, but they would still carry on with the debt collector’s eyes on the bonus.

“Team leaders always threaten to fire us if we don’t achieve the goal, and when they verbally insult us, we tend to transfer the aggression onto the customers using any means possible to recover the company money,” he said.

Intervention at snail’s speed

In November 2021, the federal government established a joint committee of regulators to address consumer rights violations and unfair practices in the money lending industry.

The agencies responsible for carrying out the investigation included the Federal Competition and Consumer Protection Commission (FCCPC), the Economic and Financial Crimes Commission (EFCC), the Central Bank of Nigeria (CBN) and the National Human Rights Commission. rights (NHRC).

Others involved in the investigation are the Independent Corrupt Practices Commission (ICPC) and the National Information Technology Development Agency (NITDA).

Four months later, the operations of these illegal loan sharks have continued unabated without any sanction from the country’s regulatory bodies.

FCCPC spokesperson Ondaje Idagwu said CIRI that the joint committee would crack down on loan sharks after triaging complaints sent in by the public.

“The joint committee has met and agreed on how to proceed, but what I can say is that there will be execution work very soon to close these loan companies , especially illegal companies.

“What we’re doing right now is gathering evidence and compiling our emails about complaints from people affected by the actions of these companies and that process takes time,” he said.

The email address to contact the Loan Application Complaints Task Force is [email protected]

A major decision taken against lending applications in Nigeria came in August 2021, when NITDA fined Soko Lending Company N10 million for sending threatening messages to borrowers, a practice considered a breach of security. private life.

With regulatory agencies yet to act, online advocacy groups have sprung up to help victims of loan companies craft responses to harassing calls.

More than 1,500 victims have joined a private Facebook group, Mobile Loan Apps Debts Victims in Nigeria, to support each other and intimidate debt collectors who harass them with calls and messages.

Another group called Say No to Sokoloan, LCredit ETC on Facebook has over 1,700 members set up to provide psychological support to victims of harassment on loan apps.

The Central Bank of Nigeria (CBN) Consumer Protection Regulations do not allow a financial institution to contact friends, employers or relatives of a defaulting lender unless consent is granted.

Most loan applications blatantly ignore consumer protection regulations and regulators turn a blind eye. However, it is up to the breached users to take steps to seek redress.


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