Digital Loan Sharks Prey On Inflation-hit Nigerians

Published: Thursday, September 4, 2025 at 5:57 am

Digital Loan Sharks Exploit Inflation-Hit Nigerians

Nigerians, grappling with soaring inflation, are increasingly turning to digital loan apps for quick financial relief. However, many are finding themselves ensnared in a cycle of debt and harassment. The apps, often promising low interest rates, are proving to be predatory, employing aggressive tactics when borrowers struggle to repay.

The economic climate, marked by President Bola Tinubu's reforms aimed at revitalizing the economy, has led to a surge in inflation, currently at 21.8 percent. This has significantly impacted the value of the naira, leaving many citizens with diminished purchasing power and in desperate need of funds.

Borrowers, seeking short-term loans, are often lured by the ease of access and swift processing offered by these apps. However, the terms can be deceptive, with interest rates far exceeding initial promises. When borrowers default, the apps resort to extreme measures, including contacting phone contacts with threats and even sharing sensitive information and photos.

The Federal Competition and Consumer Protection Commission (FCCPC) has taken steps to regulate the industry, approving hundreds of apps and delisting others for various offenses, including harassment. However, the problem persists. Despite regulatory efforts, many apps continue to operate under new names, and weak sanctions and poor enforcement allow loan sharks to thrive.

The scale of the issue is significant. In the last quarter of 2024, lenders in the country disbursed approximately 470 billion naira in personal loans. By December, outstanding personal loans jumped by over 21 percent to 3.82 trillion naira. Consumer complaints are mounting, with civil society organizations receiving thousands of reports of predatory practices.

BNN's Perspective:

The situation highlights the urgent need for stronger regulatory oversight and enforcement within the digital lending space. While the government's economic reforms are intended to stimulate growth, they must be accompanied by robust consumer protection measures to prevent vulnerable citizens from being exploited. A balance must be struck between fostering financial inclusion and safeguarding individuals from predatory lending practices.

Keywords: digital loan apps, Nigeria, inflation, predatory lending, interest rates, harassment, debt, economic crisis, consumer protection, FCCPC, CBN, personal loans, financial hardship, loan sharks, naira, Bola Tinubu, economic reforms

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