Nigeria’s Money Lenders Association has urged the public to be extra careful and carry out due diligence before applying for loans from any moneylender online or via mobile applications.
The warning was contained in a statement issued Wednesday by the association’s President, Mr. Gbemi Adelekan, and Vice-President, Dr. Henry Ationu.
According to Adelekan and Ationu, the alarm had become necessary following 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 intent to enlighten the public on how to avoid such fraudulent operators, the statement highlighted red flags to watch out for and how to identify genuine money lenders.
The statement noted that “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.”
Adelekan and Ationu further stated that other things to look out for include the lender’s web visibility, physical location and its operational licence.
They warned that a lender asking for security deposit should not be patronised.
“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.”
It continued: “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.”
They also recommended that for extra security, it is better to “download the mobile application of your intended Lender, from the App Store and not directly from the website of the intended Lender. Intended customers can also check www.moneylenders.ng for information.”