Money Lenders Association urged Nigerians to exercise caution and do due diligence with lenders before deciding to apply for loans from a lender online or through mobile apps.
The president of the association, Mr. Gbemi Adelekan, said that the association saw the need to enlighten the public after a report exposing the operations of unethical and unprofessional activities of some lenders in the sector who cause misery and pain to clients with their modus operandi. .
Adelekan, in a statement on Wednesday, said: “In recent years, there has been an increase in the activities of money lenders, mainly online, to provide quick and emergency loans to the people to meet basic needs.
“Most of our licensed operators operate ethically within the limits of the law and in accordance with the association’s professional code of conduct, as we self-regulate our activities.
“Unfortunately, some online lenders are operating illegally and using deception and other illegal behavior to take advantage of financially troubled consumers who seek these loans.
“We have found that some lenders use threats such as loan collection methods, fraud and disseminate clients’ personal information to families and friends when loans are not paid when due. Not all lenders engage in this type of unhealthy action.
“Any lender promising to approve loan applications before performing any analysis of the application is definitely a red flag.”
Other things to watch out for, he said, include the lender’s web visibility, physical location, and approved lenders.
He said that a lender asking for a security deposit should not be patronized.
Adelekan, however, advised borrowers to honor their obligations.
He said, “It’s important to know that your lender must have a physical location where the business is registered or from which the business operates. This information may be available on the lender’s website.
“It is mandatory for legitimate lenders to indicate the license they are using to operate. The online lender can use a state issued money lender license or a license from the Central Bank of Nigeria. Check the lender’s website to make sure you are dealing with a legitimate provider.
“A lender who asks for a security deposit or a substantial payment before the loan application is considered is definitely fraudulent. ”
According to him, the most reputable lenders would be visible on the web and social networks.
He said, “The lender will usually have a website and personalized email for communication and information. Lenders using general email addresses like Gmail or Yahoo etc. can also be an alarm signal.
“Borrowers should be careful before providing their contact details to such companies. ”
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