By Okechukwu Nwanguma
Across Nigeria today, thousands of families are trapped in a new and terrifying form of bondage – digital loan slavery. What began as a financial inclusion innovation has degenerated into an unregulated nightmare of predatory lending, harassment, and human rights violations.
Licensed and unlicensed microfinance banks, alongside hundreds of digital loan app operators, now operate with brazen impunity, flouting every known regulation of the Central Bank of Nigeria (CBN), the Money Lenders Act, and the Nigeria Data Protection Act.
Every day, desperate Nigerians who turn to these lenders for small emergency loans end up suffering public humiliation, cyberbullying, extortion, and mental breakdown. Some have even lost their lives.
From Financial Inclusion to Digital Terror
Under the guise of helping the poor and expanding access to credit, many microfinance banks and loan apps have perfected a system of exploitation that is both criminal and inhuman.
Borrowers are charged exorbitant interest rates – sometimes 60% in seven days – and subjected to illegal compound interest that can turn a ₦50,000 loan into ₦300,000 in just two months.
When they can’t repay on time, the torment begins: Borrowers are called “ritualists,” “kidnappers,” or “HIV patients.”
Loan app agents send defamatory messages to their family members, employers, and contacts.
Some parents are falsely told their children have died, causing trauma and even medical emergencies.
Victims receive hundreds of threatening calls daily – a form of digital torture that drives many into depression.
In one particularly tragic case, a woman reportedly took her own life after relentless harassment by a loan app that bombarded her with insults and threats. At least ten such deaths have been reported among members of a certain network of victims alone.
The Regulatory Silence Is Deafening
The CBN’s Consumer Protection Framework and Fair Lending Policy clearly prohibit such practices. Yet, even some CBN-licensed institutions like LAPO and FairMoney have been accused of charging between 60% and 400% interest annually, in flagrant violation of these regulations.
Meanwhile, unlicensed operators – many with no physical address – continue to terrorize Nigerians under the weak supervision of agencies that should protect consumers.
The CBN, the Federal Competition and Consumer Protection Commission (FCCPC), and the Nigeria Communications Commission (NCC) have all announced measures at different times, but enforcement remains inconsistent and reactive. In the vacuum, loan sharks have built a multi-billion-naira industry on fear, shame, and pain.
A Matter of Law, Health, and Humanity
This crisis is not only about money; it is about human dignity and the rule of law.
The activities of these predatory lenders violate not just financial regulations but fundamental human rights- to privacy, reputation, and freedom from inhuman and degrading treatment. The growing number of victims experiencing mental health breakdowns, job losses, and suicides makes this a public health emergency.
It is unconscionable that in 2025, Nigerians must risk their lives to borrow ₦10,000 from a so-called microfinance platform.
What Must Be Done
Nigeria must urgently align with international best practices. The World Bank’s Principles for Responsible Digital Credit (2021), the G20’s Principles on Financial Consumer Protection (2022), and the Reserve Bank of India’s Digital Lending Guidelines (2022) all mandate affordability checks, transparent pricing, and ethical collection methods.
In Kenya and India, abusive loan apps have been banned, traced, and prosecuted. Nigeria must do the same.
The Central Bank of Nigeria should:
- Conduct a nationwide audit of all microfinance banks and loan apps, licensed and unlicensed.
- Revoke licenses of operators engaged in predatory lending or harassment.
- Enforce legal interest caps and prosecute offenders.
- Establish a robust complaint mechanism accessible to all borrowers.
- Work with FCCPC, NCC, and law enforcement to trace and shut down untraceable operators.
- Ensure strict compliance with the Nigeria Data Protection Act to end the criminal misuse of personal information.
These measures are not optional; they are the only way to stop what has become a national disgrace.
A Satanic Enterprise in a Lawful Nation
What we are witnessing today is a satanic enterprise – a system that preys on the poor under the pretext of empowering them.
Families have been destroyed, reputations ruined, and lives lost. Unless the Central Bank acts decisively, these financial predators will continue to spread misery unchecked, undermining not only citizens’ wellbeing but also the integrity of Nigeria’s financial system.
The CBN must show that it stands not only for monetary stability but also for justice, accountability, and the protection of human life.
We can not build a stable economy on the broken backs of the poor.
▪Nwanguma is the Executive Director, Rule of Law and Accountability Advocacy Centre (RULAAC). He writes from Lagos.
Courtesy:TheNiche.
