More than ever, lending companies and other credit facilities are operating in Nigeria. And in many ways, they’ve changed how accessible loans are. A number of them operate mostly online; offer collateral-free loans; approve and disburse the funds within minutes. So I thought to talk to some Nigerians about how they use these credit facilities. These are the answers I got.
I started taking loans from these online loan companies sometime last year, and it’s been recurring since that time. The first time I took one, something urgent had come up and I needed to travel to my village. I talked to everyone I could take a short-term loan from but nobody came through. A friend advised me to give one of these credit companies a chance, and I did. They offered to loan me ₦5k and I would pay them back ₦7k in five days.
I thought it was outrageous — the interest was high and the duration was short, but I was desperate so I took it. I got a small job later that week and made ₦8k in profit from it. But most of it went into clearing the debt. I was back to 0.
I’ve been taking short term loans since that time — between ₦5- ₦10k. I don’t like to but it always ends up being my only option. It’s not even easy for me to pay back. I’ve missed payments. There was a time I didn’t pay back on time and they sent threatening messages to me and some of my contacts. Then they called my brother.
I think taking loans from these companies is a bad idea. I know I have to stop, but I just haven’t figured out how to stay away from them.
I was always sceptical about loans. I thought the typical timeframe for repayment was unrealistic. This was my stance until I needed to buy land in Abuja in 2018. My first choice would have been the federal mortgage bank since they’re supposed to play this role, but they’re not very effective. The next best thing was to go through the private mortgage operators.
Fortunately, I didn’t have to go down that route — I got the ₦3m I needed from a cooperative. The terms were fair too. I was going to pay ₦120k back in interest and repayment was spread over 60 months. I’ve been paying ₦52k every month and I’ll finish paying it off by February next year.
I’ll admit that for the first few months, I found it a little hard to take ₦52k out of my salary. But like Le Chatelier’s principle, I adjusted my spending habits and got used to it. For context, my salary is ₦190k.
I’m more open to taking loans these days. I think the sector is becoming more competitive, and that might be a good thing.
I took a loan for the first time in 2017. At the time, I was a broke final year student. I randomly googled “How to get a loan in Nigeria” and I got a lot of results. None of them asked for collateral and that drew me in.
The first company I tried claimed I was ineligible for their loan offers and declined my requests. I got around that by asking a friend who was eligible to apply for a loan on my behalf. Later that year, I switched to another company, and it became my go-to. Once I ran out of my allowance in school, I applied for a short term loan.
I continued taking loans even after I left school, got my first job and moved out of my parents’ house. The good thing was that as I took the loans and paid them back, they increased the amount I was eligible for. Within a couple of months, I could take up to ₦60k.
Something weird happened in 2018 — I was curious about what would happen if I defaulted on payment. I took a ₦60k loan and decided not to pay it back. They sent me a series of reminders as the due date approached and I ignored all of them. A few days after the due date, they notified me that they had added a late-payment penalty to my initial payment and extended my grace period. When I didn’t clear the balance, they told me they would start sending texts to my contacts. Again, I called their bluff. Then a friend called me to ask whom I owed money. They sent threatening messages to about five people on my contact list, including my boss at the time.
This was when I realised that they could read my phone contacts. For some reason, they stopped contacting me. And I still didn’t pay because I thought they’d done their worst already.
When they started contacting me again in 2020, I decided to clear the debt and move on. The whole situation affected my credit score as I can’t borrow a lot of money from them anymore. I still don’t know why I did it, and I understand that it was reckless behaviour. But I’ll live. I’d rather take a loan from someone I know now.
I’ve taken a loan but it was a one-time thing. I needed capital to trade forex and I was short of cash even after pulling everything out of my bank account. It was quite easy to get the loan — I downloaded an app, answered a few questions and they calculated my credit score. Oh, I should add that the first two loan companies I tried declined my request. The third and fourth companies offered me ₦10k and ₦5k and interest on the loans within 30 days was ₦2k and ₦500 respectively. Now that I think about it, it was rather high. But I respect it. Also, I made money on my forex investment so it was easy to pay back the loan.
I think credit facilities will continue to grow. The returns are great, so I think more players will come into the space in the future. I can’t say I mind — they are easily accessible, and that’s not a bad thing.