For several years now, many Nigerians have failed in accessing soft loans from commercial banks to temporarily salvage themselves from their financial problems and this has made them to resort to applying for such loans from online money lenders, which were much more easier to reach and acquire loans and which required no collateral. Such online money lenders include Fairmoney, Carbon, Palmcredit and Branch etc. of which some Nigerians have considered to be the best in terms of interest rates, repayment plan and zero customer and guarantor threats, and which are licensed with the Central Bank of Nigeria (CBN).
But a lot of events have occurred these past few months relating to the unethical mode of operation of these online loan companies, which include the defamation of customers, prying on customer’s privacy and giving of death or other sort of threats to customers and guarantors. No wonder Benjamin Franklin said “When you go borrowing, you go sorrowing”.
Nigerians have complained bitterly about some online money lenders such as Sokoloan, Gocash, Nowcash, Lcredit, Easycredit, 9credit, Okash, KashKash and a host of others, for their invasion of privacy and defamation.
This propelled the Nigerian Government to make a move against these microloan companies in the country on the grounds that they were going beyond the ethical mode of operation as it was wrong and highly illegal to defame or issue threats. The federal government first threatened a clampdown on the online money lenders by taking legal action to block every loopholes before moving on to ban their activities.
This issue with the passage of time has met a lot of mixed reactions. Some social media judges are either of the view that the online soft loan companies are wrong and should be proscribed rather than regulated, while some believe that the online soft loan companies were right for demanding what’s rightfully theirs, and also believe that these companies have helped Nigerians in their time of need, and should not be banned.
People need to understand this issue with more rational and critical thinking rather than showcasing their flawed sentiments. Neither the federal government, the online money lenders, nor our Nigerian netizens (those who mostly supported the government’s action) are right on this issue from what they have said or done.
Why are the Loan Sharks wrong?
Some loan sharks have been a nightmare for Nigerians with their illegal operations in the country. It was wrong for them to go against data privacy and protection laws, which do not support collection of third party data for disseminating unsolicited messages and calls. They do this, accuse the third parties of being guarantors, hold them accountable and threaten to take action against them or even embarrass them if the debtor does not pay.
It was highly illegal for the money lenders to defame their debtors. How does this in anyway guarantee a repayment of the loan after an image has been destroyed? It’s pure madness. It was highly illegal to declare defaulters dead by converting their images to obituaries and circulating it to their contacts.
Public embarrassment will not guarantee payback when an image has been defamed. What if the defaulters have low self-esteem or are mentally unstable. It may lead to a suicidal attempt, thereby preventing a possible loan redemption.
It was also wrong for loan app agents to impersonate themselves as lawyers to threaten defaulters. I could remember early this year, a legal practitioner and principal consultant of FBI Legal, Firsts Baba Isa complained about how Procash used his picture to threaten defaulters of a legal action. Going to the extent of engaging in impersonation is highly illegal and could even cost the loan sharks.
The government should ensure that the operations of loan sharks are regulated and well monitored.
Why is the Federal Government wrong?
When I read a news report about how the government had proscribed the online money lenders, I felt dismal because it was someone’s venture and there were probably hundreds of customers who may have not paid back. Some people have been greatly assisted in times of emergency through these loan sharks.
What the government should have done was to regulate and monitor their activities. The result of these illegal and unethical practices by the loan sharks was as a result of the total control of the activities being in their hands.
The government were supposed to make laws that would protect the interests of the company and the masses rather than banning them and freezing their bank accounts.
The government should make it compulsory for microloan companies that want to operate in the country to be fully registered by/under the Corporate Affairs Commission (CAC).
The government should also give them a mode of operation, work on their high interest rates and repayment plans.
If all these are put in place, things would surely be better.
Why are Netizens wrong?
There is one thing people do not know. It is wrong for a contractor to collect advanced payment and run away. It is wrong for a supplier to collect money for goods and not supply anything at all. It is wrong to borrow money without collateral and intentionally end up not paying the debt. It is very asinine.
The action of the government should not be praised because it will only be temporary and regrets will come in the morning. Calls should be made for regulation and not proscription. A time would come, you would wish that they were there to lend you a helping hand.
The online money lenders are better than our banks because they are into mutually beneficial ventures. When you borrow from the bank, you stake a property as a collateral, and if you default in payment, it will be confiscated.
This is someone’s business and it will end up crumbling without money. Some people are not trustworthy. As a borrower, you are expected to pay back although certain unforeseen circumstances. And even if these unforeseen circumstances arise, we do not expect them to let go of their money like they are a charity organisation.
Before taking any loan, people should also learn to read the terms and conditions fully before taking such loans. They should also avoid borrowing money from microloan with high interest rates (25%-50%)
People should also avoid adding people they never knew as guarantors. It isn’t right. Why add someone who doesn’t willingly give consent in writing.
I hope we understand this issue from all angles as it would be good for our positive social change.
