An increasing number of young Nigerians are being drawn into debt as the use of quick loan mobile applications continues to rise across the country.
The digital lending platforms, which advertise instant cash with little or no documentation, have become popular among youths struggling with unemployment, low income and the rising cost of living.
Findings show that many of the loan apps offer small amounts, often between ₦5,000 and ₦50,000, but attach high interest rates and short repayment periods.
Borrowers who fail to meet repayment deadlines are quickly hit with penalties, causing the original loan to multiply within days.
Related News:
Banks to Deduct 7.5% VAT on POS, Mobile Transfer Fees
Small Businesses Are Dying Despite Nigeria’s Entrepreneurial Spirit
UBA Faces Lawsuit Over Alleged Illegal Account, N5bn Transactions
Reports indicate that many borrowers resort to taking new loans from other platforms in order to repay existing ones, thereby falling into a continuous cycle of debt.
There have also been complaints that some loan companies employ aggressive recovery methods, including persistent calls, threatening messages and contacting phone numbers saved on borrowers’ devices, leading to embarrassment and emotional distress.
Financial experts have linked the growing dependence on quick loans to worsening economic conditions, rising inflation and limited access to traditional bank loans, especially for young people without stable income or collateral.
They warned that continued reliance on digital loan apps could negatively affect borrowers’ credit profiles and worsen their financial situation in the long term.
The experts advised young Nigerians to carefully read loan terms before borrowing, avoid using loans for non-essential expenses and explore alternatives such as cooperative societies, savings schemes and financial literacy programmes.
Despite repeated warnings, the popularity of quick loan apps continues to grow, raising concerns over consumer protection and the need for stronger regulation of digital lending platforms in Nigeria.