By John Silas
Attention of the Money Lenders Association have been drawn to the recent unethical and unprofessional activities of some lenders in the industry who are causing misery and pain to customers and the public at large, with their mode of operations.
According to a press release signed by Gbemi Adelekan, president and Dr. Henry Ationu, Vic President, Money Lenders are providing important services in Nigeria, by lending to individuals with regular income, Micro/Small Businesses and those that are unbanked in the society including market women, artisans and those in the lower income bracket. Money Lenders are able to give quick credit to those that would not normally have access to finance from the normal traditional financial institutions.
The statement disclosed that in recent years, the activities of moneylenders have increased, mostly online, to provide quick and emergency loans to the population to meet essential needs. 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.
Speaking further, the group averred that 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 borrowers use threats as loan collection methods, fraud, and disseminate personal information of customers to families and friends when loans are not repaid, when due, adding that not all lenders engage in this type of unwholesome actions. Members of the Money Lenders Association are bound by the code of conduct of their Licence.
Money Lenders Association, they said, is an association of Licensed Money Lenders, including Online Lenders who work for the betterment of the industry and to safeguard the interest of public and customers of money lending business. Member lenders are bound by the professional code of conduct of the Association and are encouraged to carry out the necessary “KYC” (Know Your Customer) before credits are granted.
However, due to the recent increase in fraudulent and unlicensed Lenders using mobile lending applications and the digital space to advertise quick and instant Loan to the general public, it has become extremely important for the Association to alert the general public, against these unethical practices.
“We are therefore encouraging borrowers to be careful and carry out their KYC on Lenders before deciding to apply for loans from any Money Lender. The public are advised to watch out for some things, before applying for a loan online or via mobile applications. Any Lender promising the approval of loan requests before carrying out any analysis of the request, is definitely a red flag.
“Other key things to look out for include, Physical Location. 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; Licensed Lenders. 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 (If there is one) to ensure that you are dealing with a legitimate provider.
“More things to look out for include Security deposit is a no-no. A Lender asking for security deposit or a substantial payment before the loan application is considered is definitely fraudulent. Any Lender asking the Borrower to pay a substantial amount i.e. Bond or Security Deposit before an application is considered is definitely a red flag. Borrowers Beware!
“Web Visibility – Most reputable lenders would be visible on the web. Most Lenders are visible on Social Media. 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.
“Borrowers Honour your Obligations: In as much as we frown at unethical lending practices, we will however advise borrowers and intending borrowers to ensure they fulfill their own part of the agreement. Once you have entered into a loan agreement and money disbursed to you, you also have the responsibility to repay as at when due.
“Read reviews from previous or existing customers of the Lenders before deciding to apply for credit with such Lenders. The review of the mobile application may show a thing or two on whether the Lender is legitimate or not. It is recommended, for extra security 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,” the group said.
