Welcome, Guest: Register On Nairaland / LOGIN! / Trending / Recent / New
Stats: 3,148,104 members, 7,799,724 topics. Date: Wednesday, 17 April 2024 at 07:58 AM

Money Lending: 8 Essential Things You Must Know. - Investment - Nairaland

Nairaland Forum / Nairaland / General / Investment / Money Lending: 8 Essential Things You Must Know. (10754 Views)

Money Lending For Investment / All You Must Know About LCF Crypto Currency | New China Cryptocurrency / What Is P2P Lending ? (2) (3) (4)

(1) (Reply) (Go Down)

Money Lending: 8 Essential Things You Must Know. by Nobody: 4:58pm On Jul 21, 2015
BEFORE YOU TAKE THAT LOAN!


(8 essentials things you need to know before taking a loan from a "money lender"wink


In Nigeria, prior to 1990, money lending was regulated concurrently by the Federal Government of Nigeria and by the various State Governments through the Moneylenders Act, 1958 and the Moneylenders Laws of various States. However, the Moneylenders Act has been repealed, leaving the regulation of money lending to the Moneylenders Laws of various States in Nigeria. Their provisions are basically the same. The Moneylenders Law of Cross River State, shall be our reference point. Unless otherwise indicated, all sections of the Moneylenders Law cited shall be from the said Law, (though in this post, no sections of the Law shall be cited)


1. WHO IS A MONEY LENDER?


A money lender is any person who lends a sum of money in consideration of a larger sum being repaid. Such a person MUST be licensed.


2. WITHOUT BEING LICENSED, CAN ONE LEND MONEY ON INTEREST?


A person, though not licensed, can lend money on interest. They are however regulated by the Moneylenders Law. "Any person other than a moneylender who gives out loan on interest is liable to comply with the law as to the requirement relating to interest chargeable".


3. WHEN IS IT ILLEGAL TO LEND MONEY ON INTEREST WITHOUT BEING LICENSED?


When one makes money lending one's regular business. One is allowed to be involved in a single or occasional transaction of money lending. However, one must be bound by the provisions of the Law relating to interest charging.


4. MUST EVERY MONEY LENDING CONTRACT BE IN WRITING?


Yes, such contracts must be set down in writing, signed by the parties to the contract or their respective agents before the money is lent or security given otherwise such contract shall not be enforceable by a moneylender against a borrower. However, the absence of writing will not, ipso facto, render the contract void. Thus, where a moneylender has otherwise enforced an oral money lender contract, the borrower cannot seek to set aside the contract simply on the grounds that it was not in writing.


5. HOW MUCH INTEREST MUST BE CHARGED ON LOANS?


The interest which may be charged on loans, whether by a money lender or by a person other than a moneylender shall not exceed the respective rates specified hereunder:

(a) on loans secured by a charge on any freehold property or Government bonds or insurance policy or the debentures or shares of any company or by a bill of sale in respect of any goods..., simple interest at the rate of 15% per annum for the first one thousand naira or part thereof and at the rate of 12 and 1/2% per annum on any amount in excess of one thousand naira;

(b) on loans secured by a second charge on any of the real or personal property..., simple interest at the rate of 17 and 1/2% per annum on any amount in excess of one thousand naira;

(c) on unsecured loans, simple interest at the rate of 48% per annum.


6. CAN A LENDER CHARGE MORE INTEREST THAN ALLOWED IN LAW?


Not only is the charging of unauthorized interest an offence, the moneylenders contract is illegal and unenforceable.


7. CAN A LENDER INCREASE INTEREST RATE BY REASON OF DEFAULT IN PAYMENT OF SUMS DUE UNDER ANY MONEY LENDING CONTRACT?


Such is prohibited.


8. WHEN WILL IT BE LATE FOR A LENDER TO SUE TO RECOVER MONEY LENT OR ANY INTEREST IN RESPECT OF A LOAN?


After the expiration of 12 months. After 12 months, the lender loses his right to sue.

-source: https://m.facebook.com/451481005025583/photos/a.451950901645260.1073741827.451481005025583/457940134379670/?type=1&source=46&refid=17

1 Like

Re: Money Lending: 8 Essential Things You Must Know. by boboLIL(m): 5:07pm On Jul 21, 2015
Nice piece...
Re: Money Lending: 8 Essential Things You Must Know. by holuwamurewa(m): 5:08pm On Jul 21, 2015
Re: Money Lending: 8 Essential Things You Must Know. by utytill(m): 5:37pm On Dec 13, 2015
How can one get the lincence?

1 Like

Re: Money Lending: 8 Essential Things You Must Know. by Doctorjames(m): 3:15pm On Oct 21, 2018
Nice
Re: Money Lending: 8 Essential Things You Must Know. by ekehopp: 11:19pm On Jun 12, 2019
hn
Re: Money Lending: 8 Essential Things You Must Know. by itamarzixuan: 8:29am On Mar 21, 2021
While borrowing money, it isn't just the money to be borrowed that you need to be concerned about. Other essential factors also need to be taken into account. I learnt this while researching on hard money loans virginia. It has broadened my knowledge.
Re: Money Lending: 8 Essential Things You Must Know. by aadiv: 8:01am On Mar 25, 2021
This is extremely fascinating substance! I have completely delighted in perusing your focuses and have reached the conclusion that you are right about a hefty portion of them. You are extraordinary. The Float Life
Re: Money Lending: 8 Essential Things You Must Know. by aadiv: 7:19am On Apr 01, 2021
pleasant post, stay aware of this fascinating work. It truly regards realize that this subject is being secured likewise on this site so cheers for setting aside time to talk about this! Toronto Iron Railings
Re: Money Lending: 8 Essential Things You Must Know. by itamarzixuan: 1:31pm On Apr 04, 2021
You guardians do an astounding web diary, and have some unfathomable substance. Continue doing extraordinary. Onewheel Accessories

(1) (Reply)

Stock Market Tips For Nigerians / Brexit Is Shaking The Markets. Volatility Cash Outs / Online Real Time Stock Trading Platforms In Nigeria.

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Nairaland - Copyright © 2005 - 2024 Oluwaseun Osewa. All rights reserved. See How To Advertise. 23
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.