The activities of some loan companies in Nigeria have been decried as improper, following the manner in which they harass their debtors.
A report from the News Agency of Nigeria has exposed the loan sharks as mostly fintech companies that offer loans at high rate returns and strict terms of collection upon failure and the illegal way they go about it.
The report showed that some of the fintech companies charge high-interest rates and service charges while giving small amounts of money and a short period of repayment. One of the sources interviewed said that the companies make it easy for people to default through their stringent measures and end up seriously embarrassing defaulters.
It has also been reported how someone committed suicide following one of such embarrassments. Another source complained of how one of the companies defamed him even after repayment of the loan.
It has also been told of the drastic actions such companies use by posting pictures and information to contacts that were not part of the agreement.
A chartered accountant, Ayoade Babatunde said that some of the fintech offering such loans are usually in breach of professional regulations. He called for decisive regulatory action to curb the excesses of these loan sharks.
In a related development, the Central Bank of Nigeria governor, Godwin Emefiele has warned Nigerians to desist from collecting loans from fintech companies, otherwise known as loan sharks.
At the last Monetary Policy Committee in Abuja, he said that those that collect money from loans from places other than microfinance banks or recognized institutions are at greater risk. He also said that people that use loan sharks are desperate and vulnerable and find it difficult to access the bank, which is the reason the loan sharks charge them above the amount borrowed.
He also said that the Central Bank can only advise people to desist from using loan sharks and urged Nigerians to take advantage of the various avenues put in place by the apex bank to access credit.
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