Nigeria should ban predatory loan apps, by Amos Yohanna
In recent years, loan applications have flooded Nigeria’s financial space, offering quick access to credit with just a few clicks. At first glance, these apps appear to be a lifeline for individuals and small businesses struggling to meet urgent financial needs. However, beneath this surface of convenience lies a troubling reality: loan apps are causing more harm than good to Nigerians.
The rise of loan apps coincided with a period of economic hardship, rising inflation, and shrinking employment opportunities. Many citizens turned to these platforms out of desperation, hoping to find short-term relief. Instead, they found themselves trapped in cycles of debt, harassment, and public humiliation.
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Most loan apps in Nigeria operate without proper regulation, taking advantage of weak financial oversight. They charge exorbitant interest rates, often hidden behind glossy advertisements promising “instant loans with no collateral.” By the time unsuspecting borrowers realise the true cost, they are already buried in unpayable debt.
Beyond high interest rates, loan apps are notorious for violating privacy rights. Many of them gain access to users’ contacts and personal data. When borrowers miss repayments, these companies resort to shaming tactics by sending defamatory messages to friends, family members, and colleagues. This invasion of privacy is not only unethical but also illegal.
The psychological toll of these practices cannot be overstated. Countless Nigerians have suffered depression, anxiety, and even contemplated suicide because of the harassment from loan app operators. What started as a financial service has become a weapon of intimidation and abuse.
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Another critical issue is the lack of accountability. While banks and licensed financial institutions are regulated by the Central Bank of Nigeria (CBN), many loan apps operate outside official frameworks. This leaves victims with little recourse when they face exploitation. Law enforcement agencies are often slow to act, giving these apps more room to exploit the public.
The culture of quick loans also discourages financial discipline. Easy access to cash tempts many to borrow beyond their means. Instead of solving problems, they accumulate more debt, deepening financial instability both at the household and national levels.
Some loan apps even engage in money laundering and other fraudulent practices. Without strong monitoring, these platforms could become breeding grounds for criminal activities disguised as financial services. This poses a wider risk to Nigeria’s economic and security environment.
For Nigeria to protect its citizens, urgent action is needed. The government should consider an outright ban on unlicensed loan apps. Any financial service provider must be properly registered, monitored, and bound by clear rules that protect borrowers from exploitation.
In addition to banning predatory platforms, regulators should strengthen microfinance institutions and licensed banks to provide accessible and affordable credit. Nigerians need genuine solutions, not traps. If regulated institutions are empowered, citizens can get loans at fair interest rates without fear of harassment.
Public awareness campaigns are also crucial. Many Nigerians fall victim to loan apps because they do not fully understand the terms and risks. Educating the public on financial literacy will help reduce the demand for exploitative services.
The judiciary, too, has a role to play. Cases of harassment, defamation, and privacy breaches should be prosecuted swiftly to set a strong precedent. Victims must know that the law is on their side, and perpetrators must understand that Nigeria will not tolerate such abuse.
International cooperation is equally important. Many of these loan apps are backed by foreign companies that exploit Nigeria’s weak regulatory environment. Stronger cross-border partnerships can help track, sanction, or block such platforms from operating in the country.
Civil society organisations and the media should also remain vigilant. By exposing the harmful practices of loan apps, they can pressure policymakers to take decisive action. Stories of victims must not remain hidden—they should be amplified to drive reform.
Still, Nigeria must balance the need for financial inclusion with the protection of citizens’ rights. Quick loans may appear to solve short-term problems, but if left unchecked, they create long-term damage.
The time has come for Nigeria to act boldly. Predatory loan apps are not a symbol of progress but of exploitation. By banning them and strengthening legitimate financial institutions, Nigeria can protect its people, restore dignity to its financial system, and lay the foundation for a more secure and inclusive economy.
Amos Yohanna is a student of Mass Communication at the Muhammadu Buhari University of Maiduguri (formerly University of Maiduguri), Borno State.
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