Late Mathew Kolawole, 24 years, a student of Lagos state university (LASU), Department of Sociology, 300 level. came from an average family, where meeting basic needs was often challenging due to their financial circumstances.
In his desperation to survive, Kolawole sought help from a loan app called LCredit. Unfortunately, the experience turned into a nightmare as he faced humiliation and shame, which led him to commit suicide when the information about his borrowing became known to his family, friends, and relatives, Precious said.
“Everything started when he was in dire need of N5,000, to make payment in school, after reaching out to Lcredit requesting a loan which was later approved with conditions to pay back in one week with the interest of N2,500 and was able to meet up.”
“With the way things were at that time, Late Kolawole saw Lcredit as a platform to get money to solve his needs and then pay back later, this prompted him to request more assistance.”
“He borrowed again, this time was given N7,000 to repay N10,500 in the space of one week, which he was still able to pay back as well, the last time was when he defaulted because he couldn’t meet up after he was given N14,000 to pay back N22,000 within the same period of one week.”
According to Precious, LCredit started sending threatening messages, warning him to pay back or else they will reach out to his family and friends, one week turned to two weeks and these people kept adding up the interest till it got to N40,000.
Being his roommate then in school, Precious said she saw his friend needed help but there was nothing he could do, LCredit finally started sending defaming messages to his friends and even his parents.
One day his mom called and told him they received a message from a number saying that he is a criminal and has HIV and that anyone who sees him should be careful. From that day, Kolawole became a completely different person, he refused to talk to anyone but Precious. He lapsed into depression.
The night before he died, Kolawole didn’t show any signs that something like that would happen, Precious recalled. Precious said he was in school when the call came from the landlady that Kolawole drank sniper and had been rushed to the hospital.
“On getting to the hospital my friend lost his life, till now I have not been able to forget this experience, although it happened in 2021 while I was in school,” he said.
According to 2019 Healthline data, about 280 million people worldwide suffer from depression, including 5 percent of the world’s adults and 5.7 percent of adults above the age of 60.
This can affect a person’s ability to work, form relationships, and destroy their quality of life. At its most severe depression can lead to suicide and is responsible for 850,000 deaths yearly.
Chisom Ibeh, who needed money to complete the payment for her dad’s treatment who recently had an accident, borrowed N15,000 from MoCredit, but was transferred N8,700 with N5,300 interest to pay back in 7 days.
“I started getting WhatsApp messages and texts from these online loan apps in May. Towards the end of May, I finally took loans from some of them.
“At first they lied that it’s a business loan and the duration would be 21 days, then on the app you see 7 days. On the 6th day, they start defaming you,” she said.
According to Ibeh, she borrowed from 10 different apps just to pay back what was borrowed because of threats she was receiving.
She said, “After 6 days or even 5, the agents would start texting and threatening me to pay back. I was taking loans from other illegal loan apps like them to pay them back. I kept doing this till early this month. I could no longer pay back, that was when the defamation started.”
“I woke up and saw a rest in peace (RIP) image, with my name and picture on it in my WhatsApp inbox, just because I couldn’t pay the N68,000 I borrowed from Swiftkash,” Carrington Palmer, a Nigerian-based crypto trader said.
Being a forex trader, and with the drop in the value of cryptocurrency, he was not able to foot his bills the way he would normally do. To make it worse, his business has not been going well since February.
He said, “My only option was to seek the assistance of these loan apps so I could survive, In early April I borrowed N40,000 to pay back N68,000 in two weeks.
Read also: U.S SEC chair says crypto still speculative, rife with fraud
“I tried raising the money, God knows but with the situation of the country, no job, the minimum wage is so poor, and employers can’t pay well, I became trapped.
“Defaulting the loan wasn’t my intention, but the way I was defamed with the RIP image and misleading information that I died as a result of HIV/AIDS, which was sent to my family, friends, and relations on my contact list was extreme,” Palmer said.
The Federal government of Nigeria, through the Federal Competition and Consumer Protection Commission (FCCPC), has been at loggerheads with the digital money lenders (DMLs), popularly known as loan apps, that are using the backdoor to continue their illegal practices.
In order to curtail the illegal practices of these loan apps, the FCCPC) approved 173 digital lending applications to operate in the country.
Out of the 173 apps, 119 have full approvals, and 54 have conditional approvals. The registration and approval process of lending platforms by the FCCPC aims to protect Nigerians from many unguided atrocities. Many Nigerians have reported incessant harassment from these loan apps.
However, on July 20, 2023, the commission announced the delisting of Orange Loan, and Purple Credit Limited as the erring companies and has since announced that they are permanently delisted as approved digital lenders in the country.
Babatunde Irukera, CEO of FCCPC said in a statement “In the course of the Commission’s continuing investigations and tracking of these illegally operating DMLs, and will delist two loan apps for unethical practices such as duplicity and the use of Android Package Kits (APKs) file formats.
According to Adedeji Olowe, founder of Lendsqr, and trustee of open banking, there are alternative and ethical ways to handle loan defaulters instead of losing professionalism.
Here are a few things to do.
Call guarantors
The guarantors would have permitted the loan companies to reach out to them in a situation like this. Olowe said lenders can use this permission.
Report to the credit bureau
The credit bureau checks are very vital. Reporting every loan defaulter to the credit bureaus makes it easier to get their information and find the loan defaulters.
Drag their data to the nearest blacklist
By reporting them, the lenders are strengthening the ecosystem and the defaulters cannot go elsewhere to secure loans because they have been blacklisted.
Hand them over to loan collection agencies
These people specialize in collecting past-due debts from borrowers. Let these agencies do the job for you while you focus on running your business rather than going through an unethical route that can damage your business.
Use the Law
When you have done everything from 1-4 and the defaulters are still owing, use the law. Either you take them to a small claims court or get a lawyer to go after them.
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