Is it safe to take loans from loan apps in Nigeria?

Is it safe to take loans from loan apps in Nigeria?featured image

Last week, my friends and I were having a chat at one of our hang-out spots. My friend on the right, (we will call her Folake) opened the conversation by talking about how she needed fast money to stock her shop for the festive season. All she kept saying was “thank God for loan apps o! I was able to buy my goods and stock my shop without stress”.

Hearing this, my curiosity was piqued. I wanted to know how she chose the loan app she used. So I asked,  “How far? How did you choose the app you decided to go with? How did you know they weren’t one of these fake loan apps?”. 

With her shoulders high up, Folake proudly said she got the recommendation from her market association group. She followed this by praying to God that she will never be a victim of any fake loan app. 

All these left my jaw dragging on the floor. All I could do was try and warn her about the danger of using loan apps without adequate research. As much as there are lots of loan apps that make lending easy, there are also lots of fake loan apps in Nigeria. I told her I don’t want her to fall into their trap”.

As a smart girl, Folake turned our hangout into a mini-seminar about fake loan apps. We had a long discussion on spotting fake loan apps and afterwards, I realised that there might be lots of people like Folake. Just taking loans from loan apps based on recommendations alone and no real research.

Today’s blog addresses this. I’ll be teaching you the difference between real and fake loan apps and how to identify them to prevent stories that touch.

How to identify safe & fake loan apps

We’ll begin by telling you how to identify fake ones. Here are the top things to note.

They don’t work with the CRC and don’t care about your credit score

The CRC is the credit bureau. Loan companies work with them to confirm if you have a good credit history before the money is lent to you. If your lending history isn’t good i.e. you’ve owed others here and there, the likelihood of you getting a sizeable loan or a loan of any amount at all is low.

If a loan company offers you a sizeable amount of loan regardless of your credit score, that’s a red flag. It may be a ploy to get you to give out your sensitive information, so they have access to your accounts or to get you to pay in advance.

They ask for advance payments

This is one of the most obvious ways to catch a fraudulent loan app. Reliable loan apps in Nigeria do not ask for advance payments or processing fees. They usually ask for your details while signing up, they access your creditworthiness through data gotten on your phone and offer you a loan amount. 

If the online loan company or loan app asks you to pay any sort of fee before getting a loan, you should run as fast as you can. These fake loan apps take advantage of your inexperience and desperation to steal money from you.

They are unavailable on the app stores or don’t have a website

A website is a business’ online address. Every legitimate company invests in websites to allow customers access to adequate information about them. If a loan app does not have a website, then there’s no evidence they exist. 

The same thing goes for the play store. If a loan app is not on the Google play store and you have to download the app via a link, then you probably shouldn’t be using the app as it’s difficult to trace them and their genuinity.

They defame their customers

This year, the Nigerian government sanctioned a number of loans because they were found to break lending ethics such as violating customers’ privacy, extortion, defaming customers to their families, colleagues etc.

These loan apps at first followed ethics by promising loans without collateral in exchange for customers data. Things then took a turn when they started threatening their customers as well as the friends and families of these customers, sometimes even going as far as accusing them of having AIDS, being criminals etc. These are loan apps you shouldn’t use as your information isn’t safe with them.

They don’t have a physical address or the address changes often

Having a website and being on the Google store is fine, but having a physical address is even better, because this gives customers the confidence that you are indeed real and they can come to you when they need help or feel frustrated.

A loan app with at least one physical location demonstrates to its customers that they are here to stay.

Examples of fake loan apps are

EasyCredit, EasiMoni, KashKash, Speedy choice, GoCash, Soko loan, Fast money, GetCash, Icoin loan, Naira Plus, 9jaCash, LionCash, Gmoney, Fast money, 9Credit.

These apps have been found to have several red flags listed above and they’ve been sanctioned by government agencies for breaking the law and lending ethics.

How to identify safe and secure loan apps

Reliable loan apps usually do the direct opposite of the things listed above.

They are secure and willing to give you a loan in minutes as long as you meet the right criteria.

  1. They give loans according to your credit score and follow all regulations by the CRC and the Nigerian government.
  2. Their interest rates are within regulation. They do not ask for outrageous interest rates. If you are wondering what the industry standard for interest rates is, click here
  3. They never ask for any kind of payment except the interest on your loan.
  4. They have a website, and are available on the Play store. They also have at least one physical address.
  5. Secure loan apps will never defame you by calling your colleagues, friends and family to tell them about your loan. They will also never threaten you or extort you.

There are a ton of reliable loan apps in Nigeria willing to give you safe and secure loans without collateral and yes, even without a salary account.

List of legitimate loan apps in Nigeria

FairMoney: This is one of the most downloaded loan apps in Nigeria with over 10M downloads. They are considered the go-to app for quick loans in 5 minutes. They give personal loans of up to 10 million and also give SME loans which are significantly higher. Check out our app here.

Branch: They presently have over 10 million downloads and give quick online loans with a repayment period of 61-180 days. Their personal cash loans range from ₦2,000 to ₦500,000. Their loans are accessible via the Branch app and require no documentation.

Kuda: Known as the bank of the free, they offer short term loans in the form of overdrafts to regular customers. Their overdrafts require no paperwork and come with a 0.3% daily interest rate. The overdrafts typically last 90 days but repayments are expected to begin 30 days after disbursement.

QuickCheck: Their instant loans are granted using smartphone data and credit scores. They offer urgent cash to help their customers take care of necessities till the next payday. For this reason, they are relatively well known and are mostly used by salary earners to plug the holes until they get paid. 

These are the top four, but there are many more. Here’s a list of how the top loan apps rank according to factors like app review, the maximum amount available for lending etc.

In conclusion,

There are many safe and secure loan apps in Nigeria willing to give you a loan in minutes, but in a bid to get a quick online loan, most people neglect to research and register for whatever app they come across. This is not advisable as it’ll come back to bite you sooner than you think.

Doing adequate research will save you from giving sensitive data like your BVN and account numbers to scammers. It will also save you from defamation and extortion. So, before taking a loan, take 5 minutes to check blogs like this, read reviews on the app store or read reviews on their social media pages. Before you take the final step, look out for the red flags stated above because they can save you. 

If you have more questions, please check our FAQs below.

  1. Is taking a loan from FairMoney MFB safe?

Yes, it is. FairMoney’s objective is to provide financial inclusion for all and we do this while maintaining the highest standards of business ethics. We are licensed by the Central Bank of Nigeria (CBN), and all deposits are insured by NDIC. Your information is safe with us and you will never be subjected to threats, defamation or extortion.

  1. How is my data used in FairMoney?

We use the data collected on your phone to help access your creditworthiness so as to provide loans faster. We also collected KYC (know your customer) data as directed by the government. For more information, please check out our privacy policy.

  1. What is FairMoney’s official website and address? 

FairMoney MFB’s address is 28, Pade Odanye close, off Adeniyi Jones, Ikeja, Lagos. Please find our website here. Check our listing in Google here.

  1. Does FairMoney charge any additional fees on loans?

We charge interest on your loans and nothing else. We do not charge processing fees or any other type of fee. If anyone claiming to be associated with FairMoney MFB requests this from you, please contact us here or here.