FOR a money-lending firm or financial company to legally operate in Nigeria, they must obtain a license from the Central Bank of Nigeria, CBN. However, The ICIR investigation discovered that several loan firms in the country violate the rules and regulations of the apex bank.

Not only that, the companies use crude methods similar to Shylock tactic to enforce loan repayment from their customers.

In August, Adeleke Ekundayo, a businessman based in Ilorin, Kwara State, was desperate for quick cash to buy drugs for his ailing mother.

He had no savings to spare. Adeleke downloaded the GoCash app, a lending app and applied to get N8,000 to buy drugs for his mother.

They credited his bank account a few minutes later, but the loan agreement terms stipulated he would return the loan within seven days.

On the fifth day, Adeleke decided to seek an extension beyond the agreed date for payment after his mother died in the hospital.

He got a rude shock. When he explained his ordeal to the GoCash loan officer, the agent rejected his request and threatened to share information about his debt with friends and family on his phone contacts.

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At the due date, the debt officer made good on his promise. He sent messages to Adeleke’s friends, relatives and office colleagues saying he was a fraudster and had defrauded the money-lending company.

The regret of losing the trust of close friends and relatives sent Adeleke into a downward emotional spiral.

“It was the worst time in my life. I used to cry myself to sleep and contemplate suicide because those messages closed a lot of doors for me,” he told The ICIR.

When Adeleke finally got to pay the loan a week later, he settled with interest and overdue charges, but the messages had done the damage.

He paid his debt into a UBA bank account named “Soko Lending Company, GOCash Collection”, but his contacts still received messages that he was a fraudster.

Soko Lending Company is the parent company of the GoCash loan app, which is owned by its directors, a Chinese national, Lu Wang and Nigerian Ayodeji Ogunjimi Samson.

During his mother’s funeral, some of his relatives still got those damaging messages, and they called him to explain why he brought shame to their family.

His attempt to convince many otherwise failed.

In August, the National Information and Technology Development Agency (NITDA) fined Soko Lending Company N10 million for sending threatening messages to borrowers, which constitutes a privacy invasion.

Opened on August 28, 2018, Soko Lending Company was legally registered (RC – 1520881) with the Corporate Affairs Commission; CAC, through its business name, has yet to comply with CBN’s licensing requirements.

There are 876 microfinance banks and 94 finance companies licensed by the CBN to engage in financial services, a list last updated on June 30.

Soko Lending Company was missing on the list. Any company offering financial services, except for stockbroking and insurance, must obtain a lending license from the CBN to operate.

READ MORE HERE: https://www.icirnigeria.org/how-fintech-loan-sharks-in-nigeria-cyberbully-trap-customers-in-debt/