When Chiamaka, a 27-year-old designer in Lagos, downloaded a preferred rogue digital mortgage app, she thought it was the lifeline she wanted to cowl her hire. The app supplied her ₦30,000 with a compensation interval of 14 days. She must return almost ₦45,000 after charges and curiosity. “It appeared unfair, however I didn’t have a alternative,” she remembers.
Two weeks later, when she couldn’t pay on time, her cellphone began buzzing. Dozens of calls and textual content messages got here each day, not simply to her, but additionally to her household, buddies and even clients. “They referred to as me a thief. They stated I used to be attempting to run away with their cash. They even informed my pastor that I used to be a fraud,” she says. “It was humiliating. I cried for days.”
Chiamaka is one in all many Nigerians caught within the internet of rogue digital mortgage apps that use aggressive ways to recuperate money owed. Debtors describe the harassment as “debt-shaming”: a observe the place lenders contact the borrower’s cellphone contacts and ship defamatory messages in a bid to drive compensation.
Rogue Digital Mortgage Apps: A rising disaster
Nigeria’s rising inflation, excessive unemployment and restricted entry to financial institution loans have created a fertile floor for the growth of on-line lending platforms. Tens of millions of Nigerians, notably younger individuals and small enterprise house owners, flip to those apps for fast money. However many of those rogue digital mortgage apps are unlicensed and function exterior the principles set by the Central Financial institution of Nigeria (CBN).
The Federal Competitors and Shopper Safety Fee (FCCPC) estimates that over 200 mortgage apps at the moment function in Nigeria, however solely a fraction are licensed. In 2022, regulators compelled Google to delist 18 rogue apps from the Play Retailer, but by mid-2023, dozens of latest ones had resurfaced beneath totally different names.
In line with FCCPC information, over 60% of client complaints filed in 2023 have been associated to digital lending apps. Many concerned debt-shaming, harassment, and information privateness violations.
“It’s psychological warfare,” says Adebayo, a digital rights advocate in Abuja. “We’ve acquired stories of individuals shedding jobs and even making an attempt suicide after being labelled fraudsters by mortgage apps.”
Weak Regulation
The Nigerian authorities has tried crackdowns. In 2022, the FCCPC, working with the Central Financial institution of Nigeria (CBN) and the Nigerian Communications Fee (NCC), launched a joint job drive to control digital lenders.
Google and Apple have been directed to solely host mortgage apps with approvals from the FCCPC, and telcos have been requested to dam shortcodes of rogue digital mortgage ap. However consultants say enforcement has been inconsistent.
“The apps shut down at present and reappear tomorrow beneath a brand new name,” says monetary analyst, Adeola. “It’s a cat-and-mouse recreation. The underlying drawback is entry to reasonably priced credit score, Till Nigeria builds reasonably priced credit score methods, individuals will preserve falling prey, as a result of So long as individuals are determined for small loans, they’ll preserve going again to those predatory apps, whatever the dangers.”
Harassment that ruins lives
For a 35-year-old taxi driver, Yusuf, the harassment was relentless. After lacking a compensation of ₦15,000, he says mortgage brokers bombarded his relations and a few of his clients with messages, accusing him of fraud. “One in every of my clients stopped coming into my cab as a result of they stated I used to be a thief,” Yusuf says. “I misplaced my dignity, and I misplaced cash.”
Civil society teams have referred to as for stronger information privateness enforcement, arguing that debt-shaming violates Nigeria’s Information Safety Act.
A name for accountability
Regardless of the crackdowns, debt-shaming stays rampant. Advocates argue that regulators should stress telecommunication networks and app shops to chop off rogue lenders.
“These firms thrive as a result of they’ve digital infrastructure backing them,” says Adebayo. “If telcos and app shops blocked them, they might disappear in a single day.”
In the meantime, debtors like Chiamaka say they’re left traumatized. “I solely needed to pay my hire,” she says softly. “As a substitute, I used to be handled like a felony. Nobody deserves that.”
The info abuse drawback
Most digital mortgage apps in Nigeria require broad permissions throughout set up — entry to contacts, pictures, location, SMS, and even social media accounts. Whereas this information is supposed to evaluate creditworthiness, rogue digital mortgage app weaponize it when repayments are late. Victims report defamatory WhatsApp broadcasts, manipulated pictures circulated on-line, and even threats of faux lawsuits. In some circumstances, lenders demand compensation inside 24 hours beneath the specter of public shaming.
“It is a clear violation of Nigeria’s Information Safety Act,” says Alabi. “Consent to share contacts doesn’t give anybody the proper to harass third events or defame debtors. These lenders are breaking a number of legal guidelines directly.”
