Chinedu Magbo, a 40-year-old Enugu-based farmer, urgently needed funds to support his poultry business in 2023.
By and large, for the fact that he was in dire need of money, he had no option than to turn to Digital Money Lenders (DMLs), which is known as loan sharks even with its neck-breaking monthly interest rate of 30%, a situation that would later deal with his finance.
However, recounting his ordeal in the hands of this Digital Money Lenders, DML to WITHIN NIGERIA Mr. Magbo said that before then, he never thought that borrowing from these mobile apps was a fast way to get stalked financially as they never will give their debtors breathing space especially if they default.
In any case, the terms required from these loan apps put him in a cycle of debt that nearly ruined his business and the dream of taking the fish business to the next level.
“At that time, I owed (several) DMLs about N2,000,000, he said stressing that, ” it became so difficult for me that it became so hard for me to pay my children’s school fees and feed them at the same time.”
He said that by May 2024, he had already borrowed from about 6 loan apps, and many had begun sending me demand notices on my loan repayment default. He said that they were even threatening him with all manner of legal actions to recover their money.
“At last, it became an open secret that I borrowed money from these loan sharks as they were busy calling all my contacts, informing them of my financial engagement with them and my eventual default.”
Jude Utazi is a businessman at Enugu. In 2022, he borrowed N1,500,000 from three different loan apps.
According to Mr. Utazi, he opted to borrow from loan apps after he couldn’t meet up with the requirements of commercial bank to lend him some money to support his business.
Narrating his horrifying ordeals in the hands of these loan sharks, he told our reporter that ” I applied for a loan of N2m from a commercial bank which I use as my business account but they gave some conditions that I couldn’t meet up with. It was my friend Jonas who introduced me to these loan apps.”
Explaining further he said that, ” I applied for N500,000 in one app and in a minute, I received credit alert. I was highly amazed. I applied in another app and received credit alert few minutes later.
” However, when I started paying back, I discovered that there were so many charges in the loan processing which they didn’t tell me alb initio. For instance, processing fee, management fee and all that.”
He went further to narrate that ” I equally discovered that a day after the due date, these people will call me like hell and threatened me like heavens will fall. Again, their interest is so high that I paid for three months, yet it was as if I have not started paying at all. I was so stressed that when I had to borrow money from friends and pay back the loan. ”
Advising fellow business men, Mr. Utazi said that ” I can never advise anybody to borrow money from any of these loan apps. They are shylocks. Their charges are not here. They will make you run mad.”
These horrid experiences and that of many like them are fueling a broader effort by some Nigerians to stand up against the predatory practices of digital money lenders.
WITHIN NIGERIA findings showed that in Nigeria, loan applications provide swift access to funds without hassle. In any case, one of the advantages or attractions of these loan apps is that unlike other electronic platforms, these loan apps usually do not need conventional extensive paperwork before money could be borrowed.
Normally what is required from the applicant is their BVN, phone number and the ban details.
However, the ugly side of it all is that apart from cyberbullying associated with the default in repayment, these loan platforms typically come with high interest rates and bore a hallmark of exploitation, access to the borrower’s contact list and other personal sensitive data.
Recall that the federal government signed the Nigeria Data Protection Act (NDPA) in 2023 to curtail such infractions by these loan sharks.
However, experts have called for stricter enforcement of laws such as the NDPA and criticised the borrowing methods used by these loan apps, saying they carry significant risks and are a problematic option for individuals seeking financial assistance.
In a chat with journalists recently, Festus Ogun, a human rights activist and lawyer said the loan app operators do not respect Nigerian laws, more so the NDPA which protects personal information.
According to him, they have severally pointed out that the loan companies do not have any lawful grounds to go as far as processing the personal data of individuals, this is notwithstanding any privacy policy contained in their website.
In an interview recently, Boye Adegoke, senior manager at Paradigm Initiative (PIN), said that talking about loan apps means that you are dealing with data breaches that have happened. This is because loan apps can access the data on maybe their customers’ phones, and in that context, what you are looking at is that.”
Adegoke added that in most cases, borrowers seeking loans from these loan apps “are ever willing to give out these data so as to get the loan they are applied for. They are so much desperate to the extent that they no longer consider the implications of revealing such sensitive information.”
In the same vein, a former acting executive vice chairman/ chief executive officer of the Federal Competition and Consumer Protection Commission (FCCPC) Adamu Abdullahi recently said that the Commission would intensify its enforcement efforts towards ensuring that digital lenders are complying with its regulation.
Stressing further, he said that lenders should not consider violating the commission’s regulation by using unethical means for debt recovery.
Federal government reactions on loan apps
Following this ugly trend, on August 1, 2023, it was gathered that the FCCPC requested Google to remove illegal apps operating without regulatory approval or in violation of the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 (Guidelines), from its play store.
In response to this request, about 37 Digital Lending apps were delisted from Play store.
Breakdown of the list showed that the apps so affected were; Swiftkash App, Hen Credit Loan App, Cash Door App, Joy Cash-Loan Up To 1,000,000 App, Eaglecash App, Luckyloan Personal Loan App, Getloan App, Easeloan Apps, Naira Naija, Cashlawn App, Easynaira App, Crediting App, Yoyi App, Nut Loan App, Cashpal App, Nairaeasy Gist Loan App and Camelloan App.
Others include Nairaloan App, Moneytreefinance Made Easy App, Cashme App, Secucash App, Creditbox App, Cashmama App, Crimson Credit App, Galaxy Credit App, Ease Cash App, Xcredit, Imoney, Naira Naija, Imoneyplus-Instant, Nairanaija-Instant, Nownowmoney, Naija Cash, Eagle Cash, Firstnell App, Flypay, Spark Credit and Luckyloan Personal Loan App.
FG issues new regulations
On Wednesday, August 20, 2025 the FCCPC introduced a new law that will provide protection of Nigerians when taking loans either cash or airtime.
Findings showed that the new guidelines capture digital lenders, fintechs, mobile money operators, telecoms, retailers, and of course any business offering credit.
However, with the new regulation, analysts are of the opinion that Nigerians accessing loans through digital platforms are set to receive stronger legal protection.
To add to this new regulation, the Federal Competition and Consumer Protection Commission (FCCPC) has also introduced a new guideline that will provide legal protection for Nigerians who access loans, other lending service digitally.
According to sources, the new rules is contained in the newly enacted the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025.
It was revealed that the law seeks to address rising concerns in the sector such as predatory lending and data privacy breaches in the digital credit market. New rule for loan apps now in force to protect borrowers.
According to reports, the regulations is said to have imposed mandatory registration, transparency, and ethical practices on all lending service providers, including partnerships and ancillary services, while ensuring compliance with competition and consumer protection laws, a situation that was totally absent in the system before now.
Nevertheless, the rules apply to a wide range of operators, including loan apps, fintechs, mobile money operators, agricultural platforms extending inputs on credit, retailers offering instalments, and even telecommunications companies providing airtime and data advances.
It was further discovered that Foreign-based apps targeting Nigerians are also covered. So not only cash loans, but also credit extended in the form of airtime, mobile data, cashback, services, or barter, so long as such transactions involve a specific or verifiable monetary value falls under the new rule.
Based on the new rules, the lenders have nothing to hide from the borrowers. No hidden charges, etc. Lenders must also fully disclose all terms of service to consumers, including interest rates, repayment conditions, and applicable charges.
These terms may only be altered if expressly allowed in the lending agreement. All advertisements must be accurate, clear, and easy to understand, free from offensive, misleading, or deceptive content. Consumers must be treated fairly and equitably at every stage of engagement.
Lending agreements must not contain unfair terms that create an imbalance of rights or cause direct or indirect harm to consumers. Business must be conducted responsibly, professionally, and ethically at all times. Consumers must be promptly informed of any changes in circumstances that could affect their service terms. Credit advances must only be provided on an opt-in basis.
Equally captured is the fact that lenders are barred from accessing borrowers’ contact lists, call logs, and photos practices that had sparked outrage after some platforms used them to shame defaulters.
Again, complaints must now be resolved within 24 to 48 hours, and customers can escalate disputes directly to the FCCPC. There is also ban on harassment and shaming of borrowers; requires use of credit bureaus instead of invasive methods as stipulated in CBN Guidelines on Digital Lending, 2022 Penalties for lenders Lenders that breach the new regulations face tough penalties.
Individuals could be fined up to N50 million, while companies risk fines of up to N100 million or 1% of their annual turnover, whichever is greater. Sanctions may also target company executives, with directors facing potential bans from holding board positions for as long as five years.
Beyond consumer protection, the rules require lenders to conduct proper credit assessments to ensure borrowers can repay loans responsibly. In severe violations, the FCCPC reserves the power to revoke a lender’s licence, suspend operations, or delist the institution entirely. Federal government approves over 100 new loan apps
Our reporter that the federal government, through the Federal Competition and Consumer Protection Commission (FCCPC), has approved over 100 new loan applications in the past 12 months.
FCCPC website showed that there are a total of 322 fully approved loan apps in Nigeria as of Wednesday, February 19, while those with conditional approvals were 42. The commission has also removed about 47 loan applications from its listings, and 16 were given outright approval by the CBN.
When the enforcement of the new rules will come into play is open to conjecture. Until then, there continued to be a tale of woes, extortions and cyber-stalking and defamation of customers by these loan sharks.