Nigerians who resort to loans from online lenders following stringent conditions of banks are being subjected to psychological trauma by the lenders, VICTOR AYENI writes
Dele Awosanya (not his real name), an architect, was obviously in distress as he was drenched in sweat on this fairly cold day. He looked around the area in fear as if someone had been trailing him on his way coming, “I have been fighting all my life, trying to do good, trying to make it. I have been used and cheated, but I never stopped getting better in my chosen path, but right now I am scared and confused,” he said, with a tone of frustration.
“I am currently broke and bankrupt and these loan apps are after my life because I am unable to clear off my debts. The messages and threats are already making me consider death as a gateway to escape this shame. I have lots of prospective clients who promised me at least a contract for 2022, but if these loan companies go ahead with their threats, I cannot guarantee my own sanity. They have promised to dent my image and make sure I regret taking those loans. Now, I can only hope on God.”
Awosanya is one of thousands of Nigerians who have obtained loans from online loan sharks and defaulted for one reason or other and have had their fingers burnt as a result; they have been subjected to a level of harassment and emotional distress that have deepened their misery, shred their humanity and robbed them of their will to live.
These online lending companies have becoming a thriving source of getting quick and easily affordable loans for many individuals and business owners in Nigeria, since the process of accessing small amount of loans in banks can be lengthy and quite tedious.
With loan apps like LCredit, EasyCredit, Palmcredit, NairaPlus, QuickCheck and TrueNaira, to name a few, the revolution of digital banking in Nigeria has broken the exclusive role of banks to offer loans, thus paving the way for individuals across social strata to obtain loans online without the hassle of going through the bureaucratic processes of many banks.
Online loan apps are often hosted on Google Play Store; prospective customers install these apps on their mobile phones and must agree to their stated terms and conditions in order to use them. These apps often require the user’s Bank Verification Number and a phone number link to it, among other financial details, after which the borrower is presented with various credit ratings, interest rates and their repayment time frame.
Unfortunately, what many had thought was a flexible and digital means to cushion the effects of the harsh economic realities of the country, has turned out to be more or less a virtual maze fraught with devious and inhuman tactics that are pushing many people off the deep end into the tunnels of depression, anxiety and eventual suicide.
We were pushed to the brink of suicidal thoughts — Victims
Jaiye, a business man and father of two, had tried his hands in several businesses, including fish farming, but none of them guaranteed financial security, so he ventured into Cryptocurrency. After being scammed of almost one Bitcoin and also a group that claimed to be a cooperative seeking government fund/grants for youths trying to go into agriculture, it became clear that obtaining a loan was the only lifeline left.
“In 2017, I got married and the wedding expenses coupled with prior issues led me to financial losses with a little left after my salary, so I needed to raise money somehow. I took my first loan from a microfinance bank, but work changes between 2018 and 2021 made it difficult for me to properly consolidate my loans from the banks to pay down properly.
“My rent was due this past September; it was also the start of the first term for my children and I had to take a larger loan to pay off my former employees as well. By October, I could no longer cope, my landlord was on my neck, my children’s schools were also threatening to send them home, and I didn’t even have money to go to work. So I took out another loan, hopeful that my confirmation at work would happen soon and things would get better. That confirmation didn’t come till the second week of December.
“By then I was totally messed up financially, the only way out was to borrow by any means to keep my head above water. That was when I ventured into these loan apps. I had used one or two before and I knew how they behave, but my confidence was in my profile as a confirmed staff member of my company so that I can get a larger loan and break free from all other lenders.
“All the money I took was about N85,000 but by 2021 year end, the interest rate had grown to almost N360,000 coupled with insults and threats from their call agents. I resorted to borrowing from friends with the promise to pay back after three months, all in a bid to reduce the accruing interest from these loan sharks. I have like eight of these apps that I still owe. Some of them have forwarded my data to all my WhatsApp contacts calling me a fraudster. I have actually contemplated suicide; I think I am just being a coward about it. I have not had financial rest since 2014 – from one loan to another, for six years!”
Peter, a recent graduate, resorted to borrowing from a loan app to fund his final year university project, however, in order to clear up his previous loan, he began to borrow from other loan apps to make up for each one. By the time he realised it, he had become a target of consistent threats and invective from various call agents.
He said, “I was introduced to loan apps when I was working on my undergraduate project since they appeared to be a rather easier way to obtain loans but right now, I am indebted to several of them, owing them a total of N200,000. I do not have a reliable source of income, as I only work part time as a computer operator.
“To make it worse, my father had stroke last year and my mother has been struggling financially to clear up the medical bills. I have asked several friends for help but they all say they do not have money. When you have no one to help you and these apps are consistently harassing and insulting you, you will be tired and want to give up and end it all at once. I have thought of taking sniper close to a bush and ending it all countless times. I am just 23, this is too hard for me to bear.”
A Twitter user named Kome Ovo, said that his friend committed suicide after an online loan outfit messaged his friends and family when he failed to repay them.
“I buried a friend yesterday morning. He took his life largely because he went to borrow money from an online company and when he defaulted, they sent messages to his friends and family members including members of his girlfriend’s family; something snapped I believe, and that was it,” he tweeted.
Osas, an unemployed graduate, said his brother was also a victim of harassment and bullying by these loan sharks when he defaulted in paying back what we owed.
“My younger brother took a small loan from one of these apps and they have sent different messages to everyone in the family, labelling him a fraudster because he is yet to pay. My dad who is a lawyer nearly disowned him because he has been the one getting most of these messages. I feel so sorry for my younger brother because of the emotional turmoil he has been in ever since.
“Everything happening put me in tears because I feel as the elder brother if I was doing well and my younger brother was not lacking in anything, nothing would have made him take a loan. I feel helpless; I feel like everything is my fault and if something worse should happen to him I do not think I will ever forgive myself for it,” he lamented.
Another victim who simply identified as Alimi, said he had been having suicidal thoughts since the day when a loan shark sent a message to all the contacts on his phone list calling him a thief.
“I obtained a loan of N20,000 and was to pay back N29,000 after 14 days, but I could not meet up with the payment because I had no cash and could not borrow again. Their agent called me and sent me a voice note on WhatsApp insulting my dad. That was what pained me the most. She went on to say she will share my BVN with ‘yahoo boys’ which lends credence to the fact that our details are not safe with some of the guys operating these apps.
“Over a period of weeks, I have been receiving panic calls from colleagues, extended family members, friends, neighbours over the terrible message sent to them about me from the app. So many thoughts have been running through my mind. I feel so much shame and embarrassment. How do I explain to all these people that a loan of N30,000 is the reason why I am so humiliated? I felt so horrible and wish to take my own life,” he said.
Victor, a graphic designer, also decried the crude manner his brother was treated when he failed to pay back online lenders.
“My brother had some problems in school and began to take loans online to sort out his issues without telling anyone in the family. I got to know what he had done when the apps started sending threats to all his contacts, but it was too late by then because the loans became too much for me to handle. My brother fell into depression, and his health has declined. I still do not understand why a business model would be built around sending threats to people who know nothing about a loan.
“We have taken his phone from him and cut him off from social media completely. After he finishes his examination, we may start considering what to do. I have been with his phone ever since, and the threats are scary and enough to make one think of suicide,” he noted.
Although there are no specific data of the state of people suffering mental illness in the country, the non-governmental organisation, Mentally Aware Nigeria Initiative, noted that based on what are seen on social media and communities across the country, Nigeria is not in a very good place. With the exposure of many citizens to the pandemic and the #EndSARS protests, leading to increase in stress and anxiety, the vicious and illegal tactics utilised by online lending companies to retrieve loans from debtors may be an additional risk factor to increasing mental illnesses in the country.
Why do people resort to loan sharks?
It was gathered that the scores of online lenders dotting the virtual landscape thrive in the country due to the relative ease of obtaining loans without a paper work or collateral and the economic circumstances which have impoverished many Nigerians.
On December 2021, The PUNCH reported that in 2018, the Central Bank of Nigeria introduced a stringent loan-to-deposit ratio policy to compel banks to redirect a certain per cent of their deposits to lending to the public. But this measure has not boosted the economy as it should.
The PUNCH, October 14, 2021, also highlighted the difficulties in filing lawsuits against these online lenders due to the fact that the names they have on their apps are not their legal name, but only their brand names, hence there is a need to actually discover the particular company that gave birth to the brand that is giving out loans to people.
Findings showed that the physical addresses of these online lenders are hard to trace and a single outfit can operate at least five different loan apps and as each customer patronises one, the agents refer them to other apps under the same company when they are unable to repay in order to keep them entangled.
While it is quite difficult to know exactly who owns any of these apps or where the money they offer comes from, a number of them indicate Lagos State as the physical address on their information page on Google Play Store. However, our correspondent gathered that most of these loan sharks are private firms owned by foreigners and they have no connection with the government.
The Head of Cooperatives at the Lagos State Ministry of Finance, Mr Samuel Irewolede, made this clear. “We do not give out our loans through apps. We only give out funds to members, and that is what we deal with. The funds are loaned out according to how people submit their details so we now treat those forms accordingly,” he said.
The cloak of anonymity under which these apps operate has provided a leeway for all manner of exploitation and underhanded tactics which their agents freely unleash on their hapless users. One of their victims, simply identified as Gbenga, said he borrowed money from one app only to realise he had become indebted to three apps within a short time.
He explained, “Basically the reason why we seek for loans is because of financial aid in sorting some out our daily needs and that was obviously the same reason why I took the loans too. First of all, the loan app system does not give you much timeframe to pay back and their interest rates are cruel.
“It all starts with taking a loan from one app and because you could not meet up with the payback date, it pressures you to take from another app to pay off the first. This continues happening until you end up owing several apps and finally get stuck, not knowing what to do.
“This is my situation currently as I have three apps which I have refused to pay although I currently still do not have the money. But I am no longer bothered not because it is the right thing to do but because I have been embarrassed. These text messages have gone so far that nothing can remedy the effects it has done to me. I was suicidal and even ran away from home. So why should I still pay them back since they cannot redeem my tarnished image before all my contacts?” he queried.
Another customer who pleaded anonymity admitted that his gambling habit and crashed online investments made him turn to online lenders.
“Gambling played a big role in sourcing these loans. But it all started going south when an online investment I made crashed when its manager was arrested along with his family in 2020. I was able to access a total of N450,000 from Carbon and FairMoney and other apps and paid my friend whom I owed in full; he is out of the country now.
“The problem now became how to pay these loans back. Though some friends helped me with some money, it was not sufficient. That was when I went deeply into gambling. At a point, it seemed this was an easy way out because I was winning in gambling, but before knew it, I was in more debts than before.
“These companies swung into action, calling and messaging all my contacts, calling me a criminal on the run. No day passed without threats from them. My family was disappointed in me. The threats and insults from these apps were so much that my mental health was messed up.
“At a point, I could not access any loans again but I survived that period without taking my life. These apps are terrible. I have used up to 20 of them. That is why when I hear stories about their victims who eventually committed suicide, I always feel sad because it could have been me. I still have a debt of about N800,000 around my neck and my monthly salary is still below the N100,000 mark, so practically, all my earnings keep going to them.”
Some of the defaulters who reached out to our correspondent neither have the financial means nor requisite will to pay back these loans, and they appeared to leverage on the digital nature of these companies to bear whatever they throw at them. For instance, Solomon, an undergraduate, said he borrowed from three apps to buy food stuff while at school, but believed he would somehow be able to clear his debt.
“I borrowed money from about three apps (Carbon, LCredit and 9credit) to get food stuff in school and the loan condition was that after a week I will pay back the money with interest and if I default they will be adding another per cent of interest to it every day till I pay up everything.
“I defaulted and they started sending messages across to all my contacts including my sister. Not only are these agents humiliating me, they are also adding interest to my loan every day. I had no job before taking the loan, I just had the belief that I would be able to pay it back somehow and some of my brothers and sisters who promised to assist in school did not turn up for me,” he narrated.
A man who gave his name as Jobi said he would not repay his loan because of the blackmail and unfair interest rates he had been subjected to by the apps.
“Initially, I did not want to borrow money from them but they kept spamming me and sending me messages that I should borrow money from them. So I collected a loan from LCredit which I defaulted after 14 days. Even after repaying them, they still went ahead to blackmail me, saying I and my family are thieves. Every day they add N5,000 interest after I paid. I am not paying a dime again to them after blackmailing me.
“The interest they input on the money I borrowed is up 40 per cent and the interest increases as one borrows money from them again. I did not know this until I calculated it. Even the Federal Government only collects a tax of 7.5 per cent from companies and individuals,” he said.
Ozioma came across an online lender on YouTube and took a loan of N35,000 and was billed to pay back N43,000 with the interest charges.
“Things went bad along the line and I couldn’t meet up with the payment. They sent messages to my phone contacts calling me a fraudster. The loan collection officers are extremely rude; one even called me an animal. Sincerely, there is no way for me to repay the loan now. I have reached out to few people but it has not helped. I just hope I don’t do the extreme,” she admitted.
A Fintech banker, Mr Yomi Sabere, argued that people should not collect loans they would not be able to pay back as loan sharks also run into debts to maintain their businesses.
“If we are talking about the customers being harassed, what about the experience of online loan companies that have millions of unpaid loans still hanging in the hands of people who are unwilling to pay back? They host their server on Amazon Web Services and pay monthly charges in United States dollars for their servers, apart from the cost of funds.
“They make payments to developers for updates and salaries to support staff. Also, they are charged by different third party integrations. The bottom line is: people should learn to pay their loans as and when due, or they should not collect loans they would not be able to pay back,” he told our correspondent.
Privacy violations and the weaponisation of shame
A civil servant named Chuks, got more than he bargained for when he got a loan of N25,000 from 9Credit and was mandated to pay N34,000 after seven days with the interest and service charge. Unfortunately, he was not able to make payment on the due date, due to a delay in his salary, but the next day I struggled to make part payment. When it was two days into the due date, all hell broke loose.
“I received a call from an agent from the app and began to threaten me, telling me I messed with the wrong group and app, that they will deal with me severely. I told her give me some few minutes that I will balance up the remaining. I have been using this same app and never disappointed all the while, just this little delay. I even told her to check my previous records with them, but all I said fell on deaf ears.
“The next thing my friend called me, asking if I got a loan from 9Credit, because they sent her a message. She forwarded the message to me and I saw the phone numbers of my mum and dad were included in it, adding that they will be ‘dragged’ too. They sent the same message to my girlfriend too. A lot of my friends and relations were calling me; my mother broke down in tears,” he said.
Our correspondent received a copy of the message sent to Chuks by 9Credit. It read, partly, “Ruthless/chronic and unremorseful NC debtor! Treat as urgent: This is to inform you that: (name) with phone: 0708*******, Mummy 0706*******, Daddy 0806******* is a deceitful person. This person has proven to be a ruthless/chronic and unremorseful debtor who goes about collecting money from different companies. He is currently owing the company a large sum of money and has refused to payback nor pick our calls.”
Wale, a horticulturist, also received a warning message from NCash app. It read in part, “Since you have chosen to use your laziness, unreasonable act towards your repayment to delay other customers like you not to get fund, your attitude seems fraudulent, just note that, if at the end of today we did not receive your payment, damage will occur to your reputation, more people will call you worthless, ruthless and chronic debtor, and we are going to embarrass you and declare you a very deceitful, chronic debtor.
“We will make sure we disgrace you with every possible means because of this your unpaid loan. This is seven days agreement loan and you knew that before applying for this loan. We will disclose your BVN and privacy and render you worthless to the public.”
Another user named Sylvester who defaulted due to unpaid three months’ salary at his workplace complained that the app agents sent his pictures with incriminating messages to all his phone contacts.
“I had to go back to read through their terms and conditions to know if posting my pictures and sending of messages to friends and family members were part of the deal, but they were not. Whenever I see their calls, I feel depressed and I have asked them to go ahead with their threats,” he noted.
Not only do these online lenders resort to verbally primitive and rhetorically violent language in their messages, they also illegally violate the privacy of their users by sharing their personal information with individuals or organisations.
According to the Google Privacy Policy, no user’s personal information is to be shared without their personal consent and only in cases where that disclosure applies to legal process or governmental request.
It states, “We do not share your personal information with companies, organisations, or individuals outside of Google except in the following cases: With your consent. We will share personal information outside of Google when we have your consent. We will share personal information outside of Google if we have a good-faith belief that access, use, preservation of disclosure of the information is reasonably necessary to meet any applicable law, legal process, or enforceable government request.”
Aside from these loan apps breaching the privacy policies provided by their host, their defamatory messages is also a tactic of weaponising shame to retrieve their money from borrowers. The PUNCH gathered that another intended motive of such toxic messages is aimed to indirectly compel defaulting customers to source for funds from friends and family and in so doing, they are forced to return to online lenders to pay back their families and friends, and thus the vicious cycle continues.
A computer scientist simply identified as Boye, explained how customers can protect their personal information if they patronise online lenders.
“I was once owing an app and resorted to borrowing from other loaning apps to pay my loans. With time, I got caught up with over 10 loan apps as I was living a life of borrowing to settle and borrow again. These loan apps are smart and have permissions to every detail.
“For instance I had my nude pictures with sex videos of I and my girlfriend in my gallery (yes, I know it is stupid) and these people have been granted permissions into my storage and gallery. The rule is, you cannot borrow again unless you grant them these permissions, so they gain access to your phone, your contact, camera, gallery and location.”
“What people can do is to remove these apps of every permission they rendered them on their phone settings. Or they could long press the app on their home page, click on ‘application details,’ and ‘permissions’ and remove them from all permissions granted to these apps.
“Furthermore, after declining all permissions, they can clear their cache and data in the storage section. Once these two are cleared, these guys would not have any more access to their contacts at all. That is how to clip their wings,” he revealed.
We’re told to use any tactic to retrieve loans – online lenders
A loan retrieving agent with Dover Credit who pleaded anonymity, denied that they initiate insults but even when they deploy them, the intention is to retrieve their money.
She said, “Our superiors do not really put much pressure on us. At first, they send customers messages that are automatically on our system to remind them of their loans, then after sometime we tell them about their deadlines and they will give us a date they will refund their loans.
“But some of these people insult us when we call them, so when they do that, we insult them back. The real intention is for us to put pressure on them in order to retrieve our money. We do not know the actual amount each person owes, it is our team leader who knows all these, but as call agents, we are given defaulters’ phone numbers to call every day.”
But another call agent, Mrs Sola Erabor, who had worked part time with a loan outfit which owned Easy Naira, Happy Loan and Fast Naira, pointed out that they were trained to use such threats and abuse to recover loans.
“The pressure of the job is responsible for it. Your supervisor could give you 10 cases to work on each day and you must deliver on at least eight out of them. There is often a target amount that you are expected to retrieve, and if at the month’s end, you do not bring in anything, your salary is deducted, but if you succeed, there is a commission you are given, so agents have to use whatever it takes to get the money back, even if it involves insults, threats or shaming.
(Punch)
