By Olatunji Olaigbe
In Nigeria, a gray market has emerged to defend against predatory loan apps that publicly shame people who can’t pay.
In 2020, Titiola, a former bank teller in Lagos, wanted to start her own business as an agent banker but couldn’t afford the point-of-sale (POS) device needed to get started. With her family unable to help, she took out a loan from FairMoney, a licensed loan app, which required a full repayment, plus 30% interest paid within one month.
But when the time came to repay the loan, Titiola, who asked to use a pseudonym out of privacy concerns, didn’t have the money. So, she took out another loan, this time with Ocash, an unlicensed app she had seen advertised on Facebook. The Ocash loan had repayment terms of just two weeks, with an almost 50% interest rate.
Titiola found herself in a vicious circle of Nigeria’s mostly unlicensed and predatory soft-loan app industry. Soft loans are relatively low-value loans borrowed over a short time frame. They can range from as little as 1,500 naira ($3) to up to 500,000 naira ($1,144), and generally have a repayment period ranging from a week to two months, often with high interest rates.
To repay Ocash, Titiola borrowed from another app, Easemoni, and to repay Easemoni, she borrowed from a further two apps. By the end of 2021, she owed multiple apps, and many of them threatened to send messages to her contacts labeling her a fraud — a common tactic used by such loan apps to shame or embarrass defaulters into paying up.
Feeling desperate, Titiola turned back to Facebook, where she found groups with names such as “Say no to loan apps” and “Say no to illegal loan apps,” which were launched around June 2021 and February 2022, respectively. After making a post about her dilemma, someone suggested she reach out to Chukwuemeka Ogbu, nicknamed “The General.”
Ogbu offers services promising to help people caught in the soft-loan app industry’s spider web. With services costing from 1,500 naira ($3) to 4,500 naira ($10), he helps customers mitigate the reputational damage caused by the loan apps’ shaming messages. That can include showing customers how to backup their contacts so they can then delete them from their phone, keeping them out of the reach of the loan apps. He also sends bulk messages to people’s contacts in an attempt to offset the loan apps’ messages, sometimes by assuming the identity of the loan app and disclaiming earlier messages. He even claims to be able to get users’ records removed from the databases of many loan apps.
In addition, Ogbu runs a WhatsApp group that serves as a virtual community and a communication channel for his clients. He also encourages members to participate in weekly “thrift” contributions — a shared saving scheme in which money is held by a different contributor each round.
Ogbu told Rest of World that he started offering his services after his own experience with a loan app called LCredit, which was recently removed from the Google Play store for violating Google’s policies. Ogbu said that, in 2019, he frequently borrowed from LCredit and repaid his debt promptly, triggering more generous credit limits. The last time he borrowed from LCredit, he took out a loan of 500,000 naira ($1,144), which had a 50% interest rate and was due in two weeks. “It was something I could not afford,” he admitted.
