I’m sure you have heard and read about the public uproar and the government’s actions against digital money lending apps, if you haven’t, you can click here to read and catch up. You can also read this for more context.

I agree that some of these digital loan apps are rogue, and I agree that some of them have zero ethics and do not comply with data privacy laws. They deceive their customers by advertising false offers and they evade their customer’s privacy without the customers knowing. Worse still, they threaten customers and send all kinds of messages to other people on the customer’s contacts. 

While I agree that these aren’t techniques that should be used, I’d like to discuss them from another angle entirely. Let me start by stating clearly that I condemn the actions of these digital loan apps and I hope sanity returns to this sector. 

I’ll make my points below:

1. If we don’t have cases of borrowers who abscond, I’d like to think that we wouldn’t have the mess we currently have on our hands.

I’ve seen a lot of people complain about the actions of these digital loan apps, I’ve seen the recipients of their harassing SMS say things like “Was I there when you gave the loan” but I’m yet to hear one person question the character of the person who took that loan and decided it’s not important to pay back. I can’t but think this silence further encourages a growing culture of irresponsible borrowing.

The reality is that if those who take these loans pay back promptly or at least responsibly manage their inability to meet payment deadlines, many of these digital loan apps will have no reason to resort to harassment and embarrassment. What we have seen is that these digital loan apps resort to these horrifying techniques after the borrower has cut off all communication channels and left the lender with disappointment.

2. These digital loan apps are businesses.

In a country that’s struggling with unemployment, it is not rocket science to see that these digital loan apps are creating opportunities for individuals and creating direct and indirect employment.

It’s also important to understand that these organizations must make a profit to stay in business and when borrowers abscond, they’re unable to make a profit so they’re likely to reduce their workforce and shut down operations eventually. The actions of these irresponsible borrowers will hurt not just these organizations but will hurt the jobs that depend on them and a country desperate for an economic turnaround.

3. These digital loan apps are filling a vacuum.

Getting small loans from Nigerian commercial banks can be difficult, even impossible, especially for those in the informal sector. Small business owners, traders, apprentices, students, and the like have almost no chance of getting quick loans from commercial banks.

Conclusion:

These digital loan apps take on a lot of risks to provide loans to these kinds of people in a matter of minutes/hours. If the majority of their customers do not repay their loans, they may run out of business or change their requirements, making it more difficult to access their facilities.

So as responsible citizens, we need to speak to those around us who are owed to pay back. If we don’t, then we will be making life more difficult for ourselves. I’ll close by saying that the most difficult thing to overcome in the Nigerian business space is the lack of trust. As it is today, a cheque is not seen as a form of payment until it is converted to cash.

Nigerian commercial banks are very skeptical about giving out loans because of the growing culture of irresponsible borrowing. They have simply made it difficult to get a loan from them without some sort of guarantee that they’ll get their money back. And, seeing what’s going on with digital loan apps, can you blame them? 

These are all signs of a business environment that lacks trust. When you refuse to tell that person around you to pay back their loans, and when you say “It’s none of my business”, you’re also contributing to all that I’ve discussed above and things will only become more difficult if we don’t change.