… We’re often forced to borrow because of emergencies – Abdullahi
… The loans are non-collateralised – Olatunji
… Don’t borrow if you can’t meet conditions – Operator
Loan apps are taking advantage of desperate Nigerians to exploit them by offering loans at cut-throat interest rates and even defaming defaulters. Yet, many Nigerians still continue to borrow from them in order to finance personal, family, business and pleasure needs; PAUL OKAH reports.
Fintec is a big booming business concern in Nigeria. Loan apps capitalise on the desperation and helplessness of most Nigerians to plunge them further into poverty by offering loans at cut-throat interest rates. They even breach data privacy by requesting for sensitive information before a loan can be disbursed.
More worrisome is the fact that borrowers often have to resort to borrowing from two or more loan apps before they can offset the loan from a particular loan app, with the interest rate tripling and compounding borrowers’ misery and anxiety.
Investigations by Blueprint Weekend revealed that there are over 450 fintechs and loan apps operating in Nigeria, including Easymoni, Branch, Okash, Alend, Kuda. However, while some of them are licensed by the Central Bank of Nigeria (CBN), others are said to be “operating illegally.”
Aggressive marketing
Anywhere you turn to on the internet, it is one loan app or the other advertising loans at low interest rate – Facebook, Instagram, Tiktok, Twitter and others. Users can hardly watch a YouTube video with ease without intrusive loan apps’ adverts popping up at intervals and requesting an internet user to borrow.
The aggressive marketing style by loan apps is also noticeable on the website of companies and organisations as sugar-coated adverts by agents always pop up – even while an uninterested person is reading or researching on news websites – as the loan sharks make use of algorithms to target would-be customers.
However, from the experiences of many, anyone who falls to the temptation of borrowing from loan apps would be saying goodbye to his peace of mind. As repayment deadline draws near, or at a slightest delay in paying back the loan at the due date, customers are subjected to daily harassments with calls and threatening messages.
Sometimes, operators design obituary posters of loan defaulters and circulate on social media, apart from sending shameful messages to family members, friends and employers of a loan defaulter, thereby plunging the borrower into grief and facing social stigmatisation.
Why borrow?
Individuals who spoke to Blueprint Weekend said many Nigerians resort to borrowing from loan apps in order to solve emergency issues.
Shehu Abdullahi, an Abuja-based taxi driver, said he was forced to borrow from loan apps when his son had a near-fatal accident that required an emergency operation for him to live.
“Responsible people don’t borrow from loan apps for the fun of it. They’re often forced to borrow because of emergencies, especially if they have no one else to turn to. Two years ago, my son was involved in an accident that almost claimed his life.
“He was returning from school when he was hit by an okada rider. I just finished renewing my rent and servicing my vehicle and had just little money on me. The okada man was equally without funds. Anyone I turned to had one excuse or the other to give, so I was stuck with my predicament of needing to pay for the treatment of my son,” he said.
Continuing, he said, “I had to borrow from two loan apps to be able to pay for the medical treatment in order not to lose my son. I spent months repaying the loans as the interests were double of the amount I borrowed. It was a difficult moment as I denied myself and my family many things just to be able to save and repay the loans and have my peace. Therefore, it’s not a thing of joy to borrow from loan apps; it’s actually traumatic and energy-sapping.”
Businessman’s admonition
Also, a businessman based in Abuja, Stephen Adeniyi, said he lost his sleep and developed high blood pressure as a result of the money he borrowed from loan apps in order to resuscitate his dying business.
He said, “I will never advise my worst enemy to borrow money from a loan app, no matter how tempting. The moment you borrow from a loan app, you have kissed goodbye to good sleep and peace of mind, because your whole attention would turn to how to make money to repay the loans you borrowed.
“I developed high BP and have not been sleeping well. Imagine closing your eyes to sleep and what flashes through your mind are the threatening text messages you received from agents of loan apps to repay, otherwise they will share your information with people on your contact list. This is apart from harassing phone calls from hundreds of phone numbers belonging to them.”
He narrated how a particular loan app went as far as “designing an obituary and posted on social media saying I was dead, simply because I couldn’t pay back the loan I borrowed from them on time.”
Non-collateralised loans
Reacting to reports of loan apps designing obituaries for customers and even sending defamatory messages to customers who defaulted on repaying loans, a legal practitioner, Atanda Olatunji, advised Nigerians to sue the loan apps.
According to him, the high interest rate is due to the fact that the loan does not require any collateral.
He said, “When a loan app sends your obituary to your contacts, and even sends it to you, just because you defaulted in paying back their loan, what does the law say? Money collected from loan apps is categorised as unsecured loan. They are loans without collaterals. To compensate them for the high risk they take to give out loans without collaterals, the CBN allows them to put high interest rates on the loans.
“The CBN rules against such an act. But you can choose to sue them for defamation and demand for N100 million damages. Even if it’s not an obituary; if they send any message that defames you to your contacts or to you directly, don’t sleep on it; it’s your opportunity to rise in life; sue them. Ignorance of the law is not an excuse.”
Borrowing impoverishes
In her opinion, a secondary school teacher in Gwarinpa in the FCT, Mrs. Regina Akpan, lamented that, “Ordinarily, borrowing from loan apps would be a palatable experience if not for cut-throat high interest rates. Imagine a situation whereby you apply for a loan of N500, 000 and you are expected to pay back N1.2 million in a month or two or three months.
“So, borrowing from loan apps is plunging many Nigerians into poverty as they can hardly meet up with loan repayment; they end up impoverishing themselves while servicing loans. I, therefore, advise Nigerians to desist from borrowing from loan apps to retain their sanity and avoid unnecessary pressures.”
Weak regulation
A software engineer, Jude Okpara, said incessant calls and threatening messages from loan apps are as a result of the government’s weak regulatory oversight on loan app operators.
“Loan apps, particularly unregulated ‘loan sharks,’ harass and embarrass borrowers, primarily as a high-risk debt recovery tactic to enforce repayment, often charging exorbitant interest rates that can reach over 3, 600% annually.
“Many of these apps, which often operate without proper licensing or physical offices, exploit desperate individuals and use extreme tactics such as accessing personal data to send messages to family, friends, and employers, to create social shame and pressure.
“Recovery agents often call and send intimidating messages to the borrower and their acquaintances. Reports have also indicated that some agents take a user’s photo and modify it, circulating it on social media to humiliate them. Because loans are given quickly without collateral or strict credit checks, these apps rely on fear-based tactics to ensure repayment,” he said.
He pointed out that the Federal Competition and Consumer Protection Commission (FCCPC) in Nigeria has launched crackdowns, requiring all digital money lenders to register and forbidding them from calling or messaging contact lists. The FCCPC 2025 Regulations also aim to eliminate unethical recovery tactics.
“However, enforcement has been slack; hence, the harassment of customers. If constituted authorities are doing their duties, the harassment of Nigerians would have stopped by now. Nevertheless, borrowers who are harassed can report such apps to the FCCPC at [email protected],” he said.
No customer forced to borrow
A staff member of one of the loan apps, Mr. Iniubong Frank, said unlicensed loan apps harass customers, while licensed ones sanction staff for harassing customers. He also said Nigerians must not borrow if they can’t meet repayment deadlines.
“I have worked with many loan apps and can tell you their modus operandi. Some of the loan apps’ staff can curse your whole generation because of the pressure they get from their managers or team leads. This is, especially the unlicensed loan sharks. So, it’s not by force to borrow if you can’t repay the high interest rates.
“However, the licensed ones have regulated staff that listen to calls and conversations. If you mistakenly sound rude, you will get a deduction from your salary. If you curse or insult customers directly, you will get suspended and fined. But that doesn’t mean people should not pay up their debt,” he said.
Enforce regulations
A data analyst and ICT consultant, Gideon Mordi, said enforcement of regulations by the federal government has been instrumental in putting loan apps in check, but that there is a need for a harder push.
He said, “The activities of loan apps in Nigeria are heavily regulated under a strict framework led by the FCCPC, with enforcement in collaboration with the CBN and the Nigeria Data Protection Commission (NDPC). The core regulation is the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025 (DEON Regulations), which came into effect on July 21, 2025, with full compliance mandated by January 5, 2026.
“The DEON Regulations 2025 represent the most comprehensive framework, targeting unethical practices, data privacy breaches, and harassment. All digital lenders, including those offering airtime or data loans, must register with the FCCPC.”
Mordi said further, “Following the January 5, 2026 deadline, unregistered apps are considered illegal. Approvals expire on December 31 of the third calendar year after issuance and must be renewed. Lenders are limited to a maximum of five mobile apps to ensure better monitoring. At least one service provider for digital lending services must have local ownership.
“The new regulations expressly prohibit several practices that previously plagued borrowers. Loan apps are forbidden from contacting a borrower’s contact list (family, friends, and employers) or using defamatory language during debt recovery. Also, approved apps cannot access the borrower’s call logs, contact list, or photo gallery.
“Furthermore, the regulations prohibit automatic lending, where loans are pushed into users’ accounts without explicit request. In fact, lenders must comply with the Nigeria Data Protection Act 2023, requiring a Data Protection Impact Assessment (DPIA) report.”
He said further that before loan disbursement, loan apps must disclose all charges, including total interest rates, fees, and penalties, upfront in simple language for the borrower to understand. Also, the FCCPC monitors interest rates to prevent exploitative or exorbitant charging. The FCCPC works with the Inter-Agency Joint Task Force (IAJTF) – including CBN, EFCC, and NITDA – to enforce these rules.
He said, “As a result of the regulations, non-compliant operators face fines up to ₦100 million or 1% of their annual turnover. Directors of violating firms can also be disqualified for up to five years, while unapproved loan apps are permanently removed from the Google Play Store and Apple Store.
“Lastly, the CBN mandates that any app offering credit directly must be licensed as a finance company or partner with a licensed microfinance bank. As of 2026, major fintech apps (e.g., Fairmoney, Carbon, Renmoney) have high-tier bank licenses. NDPC handles cases of data breaches, with over 400 cases under investigation as of Jan 2026.”
He, therefore, advised that, “If they must borrow, Nigerians or consumers should only use loan apps that appear on the official FCCPC list of approved lenders, which can be verified on the FCCPC website. Apps not on this list are considered ‘one-chance’ or illegal and risk data misuse.’”
