In an economy that is gasping for survival, it is only normal for cash-strapped individuals to seek financial relief from loan financing institutions in the country some of whom are actually the proverbial shylock who wants a pound of flesh and would not care whose ox is gored.

Who was Shylock in Merchant of Venice

Shylock was a relentless and revengeful moneylender in Shakespeare's Merchant of Venice play.

Loan sharks in Nigeria act like Shylock the moneylender who seeks revenge by all means when he lends you money.

In the sprawling city of Lagos, lives a man Jakob ( not real name ). Jakob was in need of a short  term loan to fill an urgent need. To do this, he searched online for loan companies in Nigeria, not finding anything exactly.

He decided to search for loan apps in Nigeria and so his journey started with Lumos Loan Company - a digital product of Tinni Investments  Limited.

The Genesis

The loan application process was quite long and tiring unlike loans  from other facilities that require only minimal documentation. This loan company will ask for your Father or Mother's phone number, a sibling's phone number  and even access to your phone contacts, location, calendar, camera and storage device in order to have you under their eventual control.

Jakob filled the form and applied for 9,000+ loan and after some many minutes, close to an hour  of waiting, his account was funded for a 7 day loan to pay back 12500.

Jakob was happy that he could quickly foot his bills and get on with life - little did he know  that the money was sent with so much attached to it.

From the day that the loan was financed till the day it was due for repayment, Lumos kept spamming Jakob with text messages reminding him of the loan and the benefits of early payment.

They obviously do not care about repeat customers - a bemused Jakob thought but ignored their messages.

However, the communication style from Lumos loan company took a new turn on the day the loan was due. Jakob started getting calls from random numbers which Truecaller identified as Aliyu, Usman Trk....etc.

As the calls were coming in, so were SMS and Whatsapp messages requesting that the loan should be repaid before 2pm or before  3pm or before 4pm. Jakob obviously angered by these numerous messages from debt recovery officers, responded to them that: since the loan was due that day and the day was not over, they should exercise patience and that he had no means to pay until evening of the same day but the impatient and unprofessional Lumos loan officer responded  in a rather uncouth way.

The response he got to his message is the crudest and the most unprofessional response anyone could get from a company.

The loan officer said: try to pay before noon. You can borrow from elsewhere and when you have borrowed, you can repay your loan with it and then borrow another 50,000 naira to pay back the other person you took a loan from.

Jakob said he had no means to repay and told them to wait till evening. After the conversation, Jakob was blocked on the two Whatsapp lines being used by staff members of the Lumos Loan company.




After about two hours, Jakob got a call from another  random number which Truecaller identified as Smart Naira.

Hello, a male voice was heard. This is from Lumos Loan. We are calling concerning your loan. We have been waiting for you to pay since morning but you didnt pay. Please pay today if not from tomorrow, we will start flagging your BVN and sending messages your contacts.

Jakob responded by saying 'sebi it is today that the loan expired and I said I will pay before the end of the day. The loan officer then said, okay please ensure you pay and send receipt of payment to Whatsapp. The bank to send the money to has been sent to you on Whatsapp, check it and he dropped the call.

Now a nervous Jakob swiftly contacted Thomas his friend for a quick loan to pay back the loan.

Gracefully, he got the loan to repay Lumos loan and sent the receipt to the Whatsapp number of the loan company. However by the time he sent the receipt, his number had been blocked by the loan company and so there was no way to receive the message

The official email and hotline of the Loan financing company was not functional.

Jakob for fear of being targeted by the nefarious activity of the loan company in carrying out their threats of defaming his character, he sent a message to the number Truecaller identified as 'Smart Naira' . Although he got no response, he knew that was all he needed to do. Moreso that the app had shown that he has paid even though it was not explicitly stated, however another loan was waiting for him to apply and that could not have been possible if one loan was due and yet to be repaid.

READ ALSO: How online loan sharks push borrowers into sorrow

This is the story of Jakob a borrower from Lumos Loan company in Nigeria. There are many other sad stories that others have shared from their ugly experiences with loan sharks in Nigeria.

These companies call to threaten with flagging of BVN and informing your contacts of the loan you were given, disgracing you and all that. They ought to allow the CBN do the job of loan retrieval since a person's BVN is the umbrella of all his bank accounts with financial institutions in the country.

Sometime ago Sokoloan - a loan shark in Nigeria was fined N10M by NITDA for privacy breach and defamation of character of customers.  A day to the repayment of your loan and they would call you with different phones lines threatening to disgrace you if you fail to pay up the loan.

So it is not Lumos loan company alone that is a shark but there are a number of others.

When your loan is past the due date even if it is by 24hrs, they go a step further by contacting your family members and ruining your personality in process.

The Exodus

Our fictitious character Jakob has now paid and can have peace of mind but he did not leave the app and delete it without giving the loan officer in charge a piece of his mind.

Blackmailing, and threatening defaulters continue

Sharing a message sent to a victim this week by one of the loan apps, a customer said she was being threatened by XCash because she is owing the platform even though she planned to pay her debt, Nairametrics reports

The message from the loan app read: “This will shock you today! We will almost immediately commence with analyzed and detailed messaging of all phone contacts fully granted and accessed during your registration with the loan App and link up with your social media handles with attachments of your registered emergency contacts, pictures taken during registration and taken from your social media platforms, National I.D Card, BVN asterisked against public denial and some family members pictures taken from social media. You were expected to comply with the policy agreement and fulfil all in concord, but you have decided to breach the contract and activate the punishment part of the contract which is signed with Nigeria Interpol as a FRAUD CASE.
Today is your last day!!! From XCash Management.”
Another loan app called LCredit, in a message to one of its defaulting customers, wrote: “Since all methods to get your payment has been voided, we have no other choice than to create awareness on social media notifying people about you by 1 PM today.”
Another loan app, GoCash, in a message sent to one of its defaulting customers wrote: “Get ready to be disgraced… with your picture by 12 PM. Your case is here at the legal department I will make sure you cry if you don’t pay the N40,360 you are owing by 12 PM today, mark my word.”

In many instances, the apps send defamatory messages to all contacts of the defaulters as the borrowers are coerced to grant their apps access to contacts in the course of registration.

What is government doing about Loan sharks in Nigeria

However, unlicensed lenders are the only ones who engage in this unhealthy behavior. Legitimate lenders with Central Bank of Nigeria (CBN) licenses take the formal route by informing the Credit Bureau about defaulters, who then blacklist the individuals' Bank Verification Numbers (BVNs) and prevent them from obtaining loans from any other financial institution in the nation.

The FCPC requested sometime in August 2022 that Google should take down loan apps Maxi Credit, Here4U, ChaCha, and SoftPay off the Playstore because they were engaging in unethical behavior and violating user privacy.

All of the apps have been taken down from the app store as of the time this report was filed.

However, there are hundreds of others who have carried on their operations without interruption such as Okash, Ucredit, Nownownow credit, Lumos now and a host of others.

According to a businessday Nigeria report, The Federal Competition and Consumer Protection Commission (FCCPC) has barred all financial technology companies from providing payment or transaction services to online money lenders known as 'loan sharks'.

In closing, if the government bars, it should also enforce. When laws are not enforced, crimes continue unabated.

Bonus:

Best Loan Apps in Nigeria ( Fintech industry)
Kuda app: For a loan of N50,000, you paid only  4500+ in 2 -3 months and they dont threaten you or defame your character, you only only repay interest with your loan and an overdue draft penalty
Gt Bank 737 loan same as Kuda app - with very little interest rate.

Others that are okay but with too high interest are Migos Loan, Quickteller cash loan and Fairmoney loan in nigeria



These companies blackmail and defame the characters of victims when loans expire
Read more here: https://techscoopsng.com/lumous-loan-app-review-loan-shark-in-nigeria/

If you have complaints to make about loan sharks, you can forward them to this email address: lendersinterimregistration@fccpc.gov.ng with proofs/screenshots. Please, don't wait till you're defamed 🙏🏼

I believe we can put an end to this madness for good.