Like many Nigerians battered by rising inflation and a weakening naira, Ogundairo was unable to repay on time. What followed was a torrent of harassment.
“They started calling my phone contacts when I couldn’t pay back on time, saying I owed them. I lost my security, and it makes me so sad and scared,” she told AFP, describing the humiliation she endured before she was eventually able to clear the debt.
Her story is far from unique. Across Africa’s fourth-largest economy, thousands of Nigerians are turning to personal loan apps, often advertised as convenient and low-interest. But when borrowers fall short, these platforms have been accused of using predatory tactics — from threatening text messages to leaking sensitive photos and defaming debtors to their contacts.
‘Quick Fix’ Gone Wrong
A 24-year-old former student, who asked not to be named, recalled how what seemed like a lifeline quickly turned into a nightmare.
In 2023, struggling to fund his final-year thesis research after spending more than ₦300,000 on laboratory investigations, he borrowed ₦70,000. By the terms of the loan, he was expected to repay around ₦110,000 in just a month.
Unable to meet the deadline, he was horrified when the loan app began messaging his classmates, branding him a “ritualist killer.”
“It wasn’t the case of unwillingness to pay; it was just a case of impossibility,” he said, adding that he had not realised he had given the app access to his contacts when signing up.
Economic Pressures Driving Borrowing
President Bola Tinubu’s sweeping reforms — including the removal of fuel subsidies and a managed float of the naira — have sparked mixed reactions. While economists see them as necessary steps to revitalise Nigeria’s sluggish economy, the immediate effects have been steep inflation and reduced purchasing power.
As of July 2025, inflation stood at 21.8 percent, forcing many Nigerians to seek short-term loans for basic expenses.
According to the Central Bank of Nigeria (CBN), lenders handed out about ₦470 billion in personal loans in the last quarter of 2024. By December, outstanding personal loans had risen by 21.27 percent to ₦3.82 trillion compared with September levels.
Regulatory Oversight and Loopholes
Efforts to regulate the sector have expanded. By March 2025, the Federal Competition and Consumer Protection Commission (FCCPC) had approved 408 loan apps — up from 269 in September 2024 — while 42 others were granted conditional clearance. The CBN, meanwhile, approved 23, up from 14 in the previous quarter.
At the same time, 47 apps were delisted and 88 placed on watchlists for offences ranging from harassment to data privacy breaches. Regulators have acknowledged that some apps continue to operate illegally, often re-emerging under new names after being blacklisted.
Legal Pushback and Human Cost
Civil society organisations like Citizens’ Gavel say they have received more than 1,300 complaints about predatory digital lenders.
“These promises are deceptive, and borrowers soon face unethical recovery practices such as defamation, harassment, threats, breaches of data privacy, arbitrary fines, and excessively high interest rates,” said lawyer Funmi Oderinde, who works with the group.
The human cost has been severe. Victims have reported fake obituaries, doctored nude images, and other defamatory content circulated to their contacts. According to Oderinde, at least two victims who sought legal help nearly lost their lives due to the relentless harassment.
Some Nigerians have formed support groups on Facebook, with one community attracting more than 21,000 members.
Weak Enforcement, Persistent Threats
Despite the FCCPC’s pledge to monitor and curb exploitative interest rates, campaigners argue that enforcement remains weak.
“Loan sharks thrive because of poor sanctions and weak enforcement,” Oderinde noted.
For now, desperate Nigerians continue to risk their privacy and dignity for short-term financial relief, as the country’s economic crisis deepens and legitimate credit remains out of reach for many.