If you've ever experienced borrowing money from a loan shark in Nigeria, you're familiar with the misery that comes with dealing with these unprofessional lenders. For those who are unfamiliar, loan sharks refer to loan apps, digital platforms, online or offline lenders that offer loans at exorbitant interest rates with unscrupulous collection practices. These lenders resort to sending threatening, harassing, and defamatory messages not only to you but also to your contacts. Operating without proper licenses and outside the boundaries of the law, loan sharks rely on illegal tactics, including violence and blackmail, to enforce repayment.
The term "loan sharks" aptly describes these lenders, as they resemble real-life sharks—aggressive, angry, and driven by greed. Just as sharks prey on smaller, vulnerable fish, loan sharks prey on financially vulnerable individuals.
Now, you may wonder why people still resort to loan sharks despite their terrible reputation. Loan sharks attract borrowers by offering quick and instant cash without requiring collateral, which can be an enticing prospect given Nigeria's economic situation and the challenges faced in accessing loans from traditional banks. Additionally, many borrowers fail to conduct thorough research before borrowing from loan sharks, becoming easy prey for these unscrupulous lenders.
In this article, we aim to shed light on popular loan sharks in Nigeria, provide guidance on how to identify them, and offer measures to avoid falling victim to their tactics.
Loan Sharks in Nigeria The proliferation of loan apps in Nigeria has contributed to the rise of loan sharks. While these apps initially appeared to be a promising solution for accessing collateral-free loans, the reality of borrowing from them often leads to negative consequences. These faceless loan sharks disguise themselves as providers of emergency funds, deceiving unsuspecting Nigerians and swindling them out of their hard-earned money. Numerous borrowers have shared their horrific experiences with these platforms online. Some well-known loan sharks in Nigeria include SokoLoan, Kashkash, LCredit, 9Credit, iCredit, OKash, GoCash, among others. If you haven't heard of any of these loan apps, consider yourself part of the privileged top 10% in Nigeria.
Spotting Loan Sharks
Identifying loan sharks amidst legal moneylenders requires vigilance, as they won't openly admit their true nature. Without proper research, it's easy to fall into their traps. Here are key indicators to watch out for:
Unauthorized Access: Loan sharks often request access to your contacts and personal photos on your mobile phone, which they can use to blackmail you in case of default. They invade your privacy and send threats through text messages and phone calls.
High Interest Rates and Short Repayment Periods: Loan sharks offer loans with exorbitant interest rates, and the repayment terms are often unreasonably short, sometimes as brief as a week, instead of the minimum requirement of 60 days.
Lack of Transparency and Authenticity: Loan sharks operate without verified owners, physical addresses, secure websites, or even any website at all. They typically lack social media presence and valid customer service support.
Urgency and Hidden Charges: Loan sharks create a sense of urgency, pressuring you to take immediate action. Sometimes, they apply hidden charges, deducting the interest before providing the loan.
To determine the legitimacy of a loan app, check the reviews on Google Play Store or Apple App Store. People who have had negative experiences with loan apps often share their stories.
Reasons to Avoid Borrowing from Loan Sharks
If you haven't received the memo yet, let's reiterate: Do not borrow money from loan apps. We have discussed how to identify and avoid Nigerian loan sharks. While you may have your reasons for considering loans from these apps, there are numerous reasons why it is strongly advised against. Here are a few:
High Interest Rates: Loan apps charge incredibly high interest rates, with rates of up to 20% to 50% per week or month, compared to the 3.5% to 11.13% per year charged by commercial banks in Nigeria. For loans with reasonable interest rates, consider approaching reputable institutions like OG Capital.
Risk to Your BVN: Sharing your BVN details with loan apps can have severe consequences. Financial institutions warn against disclosing your BVN to unauthorized sources, as it can lead to illegal and fraudulent activities. Loan sharks may use your default as an opportunity to blacklist your BVN, significantly hindering your ability to secure loans for significant business transactions in the future.
Harassment: Loan sharks employ unprofessional, unethical, and illegal methods to recover their debts, including defamation, harassment, shaming, and intimidation, regardless of the reasons for default. If you fail to repay, you may face humiliation, and defamatory messages will be sent to your contacts, tarnishing your reputation. The struggle and shame associated with loan shark harassment have driven some individuals to the brink of suicide. It's a scenario you want to avoid at all costs.
Borrowing Addiction: Loan sharks offer easy accessibility and minimal criteria, making them attractive to the average person. Once you receive a loan, many individuals struggle to repay it within the given timeframe and end up relying on other loan sharks to settle their debts. This perpetuates a borrowing cycle, leading to addiction to multiple platforms. Such a cycle can devastate your personal finances, integrity, self-esteem, and ultimately, your life.
Conclusion
In conclusion, we strongly advise against borrowing money from loan apps. Loan sharks charge exorbitant interest rates, falsely accuse you and your associates of criminal behavior, and employ faceless agents who engage in blackmail. They exploit your sensitive information to extort you and damage your reputation. Both the government and financial institutions have emphasized the risks associated with borrowing from unauthorized loan apps. The Federal Competition and Consumer Protection Commission (FCCPC) is actively working to curb the operations of loan apps in Nigeria. While you may have genuine reasons for seeking a loan, it is never advisable to borrow funds from loan sharks. It's a "from frying pan to fire" situation, as loan sharks can lead you into even deeper distress than before. By following the guidance provided in this article, you can spot and avoid Nigerian loan sharks effectively.
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