Loan Apps or Loan Sharks? How Fake Loan Apps are Dealing with “Poor” Nigerians


I don’t know maybe you have used any loan apps in Nigeria, but I’m pretty sure you’ve seen a whole lot of “Advertisement” about different loan apps on Facebook, YouTube and even on your Android phones.

Have you ever wondered why there are so many of them?

Today, you’ll see “K-cash”, later you’ll see “L-Money” and some others. It seems there’s no tight competition in the newly loan shark industry in Nigeria, as we keep seeing new platform every now and then.

But the question we need to find answer to is;

Why are there so many Loan apps in Nigeria?

The answer is simply because Nigeria is a very poor country. The poverty rate is so high to the extend that Nigeria is crowned the “poverty capital” of the world according to CNN, Quartz and some big news platforms in the world.

BorgenMagazine reported that, about 50% of Nigerians are living in “severe” poverty.

According to WorldBank, the national poverty of Nigeria was 40.1% in 2019 and we should be expecting it to jump to 45.2% in 2022. Meaning that about 100.9 million Nigerians will be in extreme poverty then.

All these reports are true!

But what’s the correlation between the poverty rate and fake Loan apps (sharks) in Nigeria?

These loan apps promised to help “poor” people with loan. So, some people who’re in need of urgent assistance will have no choice than to take the loan.

And again, over 50% of Nigerians (over 100 million people) who are in extreme poverty are in urgent need of assistance.

Because of that, millions of Nigerians who uses smartphone or internet-enabled devices are downloading instant loan apps which has a big cybercriminal known as loan sharks as facilitator.

To be honest, giving or taking loan is not bad.

But if we take a look at these numerous loan apps floating around, you’ll notice that something is suspicious and only the smart people can discern it.

Let me tell you what the Loan sharks does, then you’ll compare with these arrant loan apps in Nigeria;

How Loan Sharks Business Works

A loan shark is a person or company that lend people large sum of money at very “high” interest rate in a very short time and asks those “borrowers” to pay even before the stipulated time using violence or threat.

These Loan sharks don’t always force people to obtain loan, but their trap is always ready to catch people who need money “urgently”.

Let’s say you need about $5,000 to pay for something urgently, maybe like hospital bill, school fees, house rent or whatever. A loan shark can lend you that $5,000 and ask you to pay $10,000 within 30 days.

That’s 50% interest rate, It’s too high. But because you need money urgently, you have no choice than to take it and start living your life in fear till you pay that loan!

They can call you anytime and ask you to pay. If you don’t have money to pay, you may be threatened to be sent to prison or they may use any kind of violence. And because you don’t want trouble, you will have to start running helter-skelter in other to pay the money back.

Note that;

  • They give loan urgently
  • They have high interest rate
  • They use a kind of threat or violence to take the money back

A loan shark will tell you that they don’t need anything from you than to give them your account number, address and phone number.

How to Detect a Loan Shark or Fake Loan Apps

  • A loan shark doesn’t care if you have a job or not. They don’t care about the source of your earning
  • A loan shark business doesn’t have a physical address
  • A loan shark will pressurize you to “quickly” take the loan without any consideration’
  • Most time, the interest rates are undisclosed until the loan has been dispersed to you successfully
  • They don’t respect you. Of course, they know you are poor and have nothing to offer or do, so you’re treated like dirt

How Loan Sharks Operate in Nigeria

Most of these loan sharks in Nigeria are organized crime unit. They hide under the pretense of helping people with loan at the “most convenient” time and hour with their Loan apps.

To get loan from some of these loan sharks posing as “helpful” loan apps in Nigeria, you don’t have to visit any office, all you have to do is click few buttons, enter your account number and boom, you’re in trouble!

In Nigeria, they try to make you believe they’re operating a legal service, so these loan sharks will ask for your BVN (where they can get your personal details).

Legally, you need to go through some stages and fill forms before you can be given a loan.

Let talk about few of these loan sharks to avoid;

Loan Sharks: Fake Loan Apps to Avoid in Nigeria

  1. LCredit
  2. 9Credit
  3. 9jaCash
  4. XCredit
  5. AjeLoan
  6. Kash Kash
  7. SokoLoan
  8. ICoin
  9. HalooCredit
  10. Appannie
  11. PayLater
  12. GoCash

And many more. IF you have an experience with any one of these listed loan apps or another one that’s not listed here, kindly use the comment box below to share the story with us – help someone!

You should note that these fake loan apps in Nigeria have something in common, and that’s exactly what loan shark business is all about.

The annoying thing Loan sharks in Nigeria do

  • Let’s say Mama Ngozi want to take a loan of N100,000 from “257-CashMoney”, a loan app in Nigeria, they’ll not ask Mama Ngozi to give them her property address or use something tangible and inanimate as collateral.

But they (these fake loan apps) will instead ask Mama Ngozi to give access to her contact list which sounds too easy and nearly meaningless to her. So, she’ll grant access without thinking twice.

After gaining permission to Mama Ngozi’s contact list, these loan apps will copy the phone numbers found and save for future.

Are you thinking what they’ll use the phone numbers for?

Well, those people with the phone number copied from Mama Ngozi’s contact list are also in trouble if Mama Ngozi failed to pay the loan she took on time.

Personally, I’ve received threatening messages and calls because someone who borrowed money from them have my number on their phone.

Maybe you have received such message before.

  • Another thing is that, since these fake loan apps have access to your debit card, they can continue to remove money from your account as long as they wish.

And if there’s no money in your account, you will be threatened with police.

And remember, police in Nigeria don’t care.

There’s no way you can avoid seeing their ads, they spend lot of money on advertisements in order to ruin the poor masses. But let’s talk about different ways you can avoid their traps;

How to Avoid Loan Sharks or Fake Loan Apps in Nigeria

  • Never use any loan apps or online platform to borrow money again!
  • Learn how to save money, so you’ll not need to seek for “urgent” loan
  • If you need to take loan, go to Microfinance banks or visit your bank
  • Ask your friends or family members for help
  • If loan apps are your only option, read more online about the loan app you want to use (check some here)
  • Whenever you have money, help those around you. So that people will help you too when you need help.
  • Another best approach is to ask for recommendation
  • Don’t be too desperate to take the loan, even if it’s urgent
  • If you take loan, pay on time.

RECOMMENDED: Check Top Banks that Gives Loan in Nigeria

What if you notice you’ve fall for any fake loan apps or shark, what should you do?

What to do if You’ve fall for Fake Loan Apps

  1. Make sure you move all your money to another account as soon as you notice it
  2. If you’re too late to move your money before they start extorting you, quickly report to the crime unit of your bank with the screenshot of the debit alert
  3. Deactivate your ATM card
  4. Report the incident in a police station, give them full details of what happened
  5. Give the fake loan app negative review on Google PlayStore or Apple AppStore and raise the alert on social media
  6. Make sure you tell your friends and family members to disregard any threat from any loan agent
  7. If possible, change your SIM card for a while

CONCLUSION: Be Shrewd, Avoid Loan Sharks or Fake Loan Apps!

Like I said earlier, over 100 million Nigerians are in “severe” poverty. And these people need “urgent” help which triggered millions of people to download instant loan apps in Nigeria.

I’m not saying all Loan apps in Nigeria are fake, but most of them are!

If you put 10 loans apps in Nigeria together, you’ll discover that just 1 or 2 of them are legit.

Remember the tactics used by these fake loan apps, they will approach you with smile. But once you fall into their trap, you’re in trouble. Not only you, but also those on your contact address.

If you need loan, you should look for a microfinance bank.

By the way, do you know that most digital banks in Nigeria like KUDA Bank, VFD Bank etc., offers loan at a very low interest rate?

A good example is KUDA Bank, you can get access to overdraft (loan) and pay 0.3% every day until you pay back.

In my own case, I can get a loan worth N30,000 right now and pay N90 as interest every day.

If I will pay in the next 30 days, that’s just N2,700 interest on N30,000 per month!

You just need to be smart and avoid being desperate on “urgent” loan.

If you have had any experience with any of these loan apps, kindly use the comment box below to share with us. And don’t forget that this blog post might be a life-saver for others, kindly share with them also.

Stephen Gbolagade
Stephen Gbolagade
Stephen is a Frontend engineer, technical writer, owner and part-time blogger here at Gbolamedia, incoming data scientist, an enthusiastic cynophilist, and a curious introvert. Stephen is currently available for full-time, part-time or contract-base role. Contact him here: on WhatsApp or check him on Linkedin


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