With inflation and economic hardship tightening their grip on households, many Nigerians are increasingly turning to loan apps for quick cash. But what appears to be a lifeline often spirals into harassment, blackmail, and public shaming.
For Mariam Ogundairo, a N30,000 ($20) loan came with a steep 21.6 percent interest rate due in just two weeks. Unable to repay on time, she soon found herself hounded by recovery agents. “They started calling my phone contacts, telling them I owed money. I lost my peace of mind,” she said.
Predatory loan apps have become notorious for such tactics, often sending threatening messages, defaming borrowers, or leaking private information when repayments are delayed. Victims say they were lured in by promises of low interest rates, only to discover hidden charges and aggressive recovery methods.
One former student, who borrowed N70,000 in 2023 to complete his final-year research, said he was stunned when the app smeared him as a “ritualist killer” in messages sent to his contacts. “It wasn’t that I didn’t want to pay, I just couldn’t,” he explained.
The surge in borrowing follows sweeping economic reforms by President Bola Tinubu, including subsidy removal, which have fueled inflation and a sharp depreciation of the naira. With conventional bank loans attracting interest rates as high as 48 percent, many see fintech lenders as the faster, cheaper option despite the risks.
According to the Central Bank of Nigeria, personal loans grew to N3.82 trillion by the end of 2024, a 21 percent increase from the previous quarter. Regulators have scrambled to keep pace: as of March 2025, the Federal Competition and Consumer Protection Commission (FCCPC) had approved 408 loan apps, while blacklisting dozens for harassment and other violations.
But enforcement remains weak, campaigners warn. Civil society group Citizens’ Gavel says it has received over 1,300 complaints from victims, some of whom faced severe psychological trauma. In one case, a borrower’s nude photo and a fake obituary were circulated after her phone was hacked by a lender.
“These loan apps thrive on deceptive promises,” said lawyer Funmi Oderinde of Citizens’ Gavel. “Borrowers end up facing harassment, defamation, and breaches of privacy, with little protection from regulators.”
Despite official crackdowns, many apps reappear under new names, and desperate Nigerians often fail to verify their legitimacy before applying. For now, digital loan sharks continue to thrive in the shadows of Nigeria’s struggling economy.
