Sometimes you read a story and are left guessing as to the reporter’s intention — do they want to highlight the point they’re making and are genuinely blind to how the chosen subjects defeat that purpose? Or are they doing it deliberately to give readers more than enough to make their own judgement after reading between the lines?
This was how I felt after reading a piece in Rest of World about loan sharks in Nigeria and the kind of end runs Nigerians are doing around them. The basic context here is that the practices that ‘payday loan’ companies have taken to recover their loans in Nigeria mean that far more people have experience of them than the people who have actually taken out loans with them. Someone you know, maybe only in passing, takes out a loan and then the next thing you are getting text messages from a lender that such a person has refused to pay. The idea is that shaming is the lender’s only recourse so they send out messages to everyone on the borrower’s contact list. In extreme cases, some of these loan companies have declared their borrowers dead and put out obituaries of them, according to newspaper reports.
Some further context is useful. When it was announced last year that the Federal Competition and Consumer Protection Commission (FCCPC) led by Tunde Irukera was going to take action against ‘unregistered’ money lenders, Soko Lending Limited was specifically named by Irukera as one of the most egregious offenders:
Soko was “one of the most prolific actors in violating consumer privacy, fair lending terms and ethical loan repayment/recovery practices,” Irukera said.
You will note that it was this same Soko that allegedly put out the obituary for one its borrowers in the story earlier linked. It also features heavily in the Rest of World article as the target of Nigerians’ ire. Some of it may be xenophobia — by all accounts it is a Chinese owned company. But it is clear the company does not have many lines it won’t cross in the name of getting its money back from borrowers.
Earlier in April, the FCCPC put out a press release which it claimed was the outcome of its investigation into digital lending apps. In reality it was just a list of the lenders which had been registered. The fact that the list had 129 companies as having obtained ‘full approval’ with another 48 on the ‘conditional approval’ list told its own story. But it did not escape attention that at number 40 on the ‘conditional approval’ list was Soko Lending Limited.
Here’s my cynical take — after receiving so many complaints about loan sharks, FCCPC spotted an opportunity to assert itself as some quasi-regulator of a new space. It will surely not have cost nothing for all those companies to obtain their FCCPC ‘registration’ and it will surely cost something to remain registered on an ongoing basis. It is unlikely that FCCPC has the skills to determine what is a good payday loan company and what isn’t.
Back to the Rest of World story. Here’s the killer line:
“They are just retaliating,” said Bayo. “These loan apps are very bad, too, so it serves them right.”
Here we see what can only be described as a match made in hell — Nigerians who won’t repay the loans they took out and the unscrupulous lenders who lent them the money in the first place. There is of course a whole other conversation to be had about eye-wateringly high unemployment rates with millions of people locked out of the financial system.
But can such a conversation really begin from a starting point of people believing that its fair to scam a loan company if it has behaved badly to them?
I don’t think so.