Money Lenders Association has urged Nigerians to be careful and carry out due diligence on lenders before deciding to apply for loans from any moneylender online or via mobile applications.
The President of the association, Mr Gbemi Adelekan, said the association saw the need to enlighten the public after a report exposing the operations of unethical and unprofessional activities of some lenders in the industry who are causing misery and pain to customers with their mode of operations.
Adelekan, in a statement on Wednesday, said, “In recent years, the activities of money lenders have increased, mostly online, to provide quick and emergency loans to the population to meet essential needs.
“Most of our licensed operators are operating ethically within the confine of the law and in accordance to the professional code of conduct of the association, as we self-regulate our activities.
“Unfortunately, some online lenders are operating illegally and employ deception and other illegal conducts to take advantage of financially distressed consumers seeking these loans.
“We have found that some lenders use threats as loan collection methods, fraud, and disseminate personal information of customers to families and friends when loans are not repaid when due. Not all lenders engage in this type of unwholesome actions.
“Any lender promising the approval of loan requests before carrying out any analysis of the request is definitely a red flag.”
According to him, other things to look out for include the lender’s web visibility, physical location and licensed lenders.
He said that a lender asking for security deposit should not be patronised.
Adelekan, however, advised borrowers to honour their obligations.
He said, “It is important to know that your lender should have a physical location where the business is registered or where the company operates from. This information can be available on the lender’s website.
“It is mandatory for legitimate lenders to indicate the licence they are using to operate. The online lender may be using a money lenders licence issued by the states or a licence from the Central Bank of Nigeria. Check on the lender’s website to ensure that you are dealing with a legitimate provider.
“A lender asking for security deposit or a substantial payment before the loan application is considered is definitely fraudulent.”
According to him, most reputable lenders would be visible on the web and social media.
He said, “The lender will generally have a website and customised email for communication and information. Lenders using general email addresses such as Gmail or Yahoo, etc. may also be a red flag.
“Borrowers need to be careful before providing their details to such companies.”