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Accessing loan has become easy for loan seekers in Nigeria thanks to the advancement of technology; however, getting debtors to pay back the loan has become a herculean task for Renmoney, Carbon, Sokoloan, and many other loan apps, as debtors have devised a new means of evading payment.
Years ago, large corporations, small businesses, and individuals in Nigeria were dependent on commercial banks to obtain loans even though the application process and requirements are cumbersome in several ways - depending on the loan seeker making the demand.
The back and forth, paperwork, and collateral made it almost impossible for small businesses and individuals to obtain loans, as most get frustrated and abandon their request. This made the number of loan requests considerably low; until recently when the Central Bank of Nigeria (CBN) compelled banks to increase their loan to deposit ratio.
The gap between small businesses, individuals, and commercial banks created an opening for Fintechs to come into the financial market and carter to the underserved population of small businesses and individuals.
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Fintechs penetrated the financial market by eliminating the need for collaterals and limiting the loan requirements to just personal information. However, AllNews gathered that the strategy used by fintechs to lure Nigerians might end up being their undoing.
Fintechs like Sokoloan, Renmoney, Carbon, are struggling to recover funds from debtors especially amidst the COVID-19 pandemic. With the only available and effective communication channel being phone conversations and lack of collaterasl, fintechs have no hold on debtors to enforce repayment.
Having known this, debtors are taking advantage of this loophole in the fintech operational strategy. Debtors have begun to report calls from loan apps requesting loan refunds as spam calls. In a quick check by AllNews, it was discovered that some loan apps' employees had been reported as spam on Truecaller.
The identity of loan app employees is being tagged fraudsters on Truecaller.
Truecaller is a mobile app used to identify callers. The Truecaller app enables its users to report contacts they identify as spam.
Contacts reported as spam are tagged fraudsters, impersonators, abusive persons or a contact can be labelled as an individual involved in several criminal activities. The spam report is shared with over 50 million users of Truecallers whenever they are receiving an incoming call from the reported contact.
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The spam alert compels or dissuades Truecaller users from answering calls from the reported contact.
Note that a spam report means that the contact has been blocked by other phone users - the more the spam report, the more the number of blocks.
This puts loan apps in a difficult financial situation, as their contacts have been blocked by several of their debtors trying to evade loan repayment. This has caused an increase in non-performing loans among Sokoloan, Renmoney, Carbon, and other loan apps.
With the difficulty in contacting their debtors, credit platforms are contacting family and friends of their debtors in order to recover their funds. Renmoney, Sokoloan, and many more are using relatives to compel debtors into repaying their debt.
AllNews gathered from one of the staff of a fintech - who spoke anonymously - that they have no choice but to take this route as debtors are trying to evade payment. The source said it has been difficult persuading the debtors to pay, as they get blocked after constant calls to ensure they comply.
The source said the block has made it difficult to reach the debtors, so the loan app has to go through the third party contacts the debtors provided while applying for the loan.
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