Mobile loan apps: shared or destructive future in Nigeria

Before any living being can thrive, the survival aspect of life must be addressed. Food, water, clothing, sleep, and shelter are all necessities for animals and humans. Besides sleep, which is naturally on the list, others cannot be obtained without a little money. Money, whether borrowed or earned, remains the most important factor in acquiring necessities. Earning and accessing money is not always easy depending on the environment due to the disparity that exists within the population. This is the main reason for various political and economic policies aimed at closing global income disparities. Business leaders aren’t taking a break from developing financial products and services, especially those focused on technology, as political leaders and civic space participants continue to develop strategies to bridge the gap .

However, as new fintech products and services are introduced daily, concerns about the effectiveness of the offerings are growing. Nigerian policymakers and the government have repeatedly warned citizens not to patronize illegal fintech businesses. Despite the warning, interest in business is growing. Our analyst’s string search on the Google search engine for “mobile app loans in Nigeria” yielded over 5 million results.

Using the same search term, numerical observational analysis reveals that people interested in using business lending apps ask a number of questions. Questions like which app can borrow 200k from me in Nigeria? Which app can borrow money from me instantly? Which application gives 50,000 loans? Which App Grants the Highest Loan Instantly in Nigeria? Who can help me with emergency money in Nigeria? Can the loan app block my BVN? What app can I borrow money without asking BVN? Which loan app is the best and most reliable in Nigeria? and How do I get ready apps to stop calling my contacts? have been found.

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In addition to these analyses, our analyst examined the behavior of Nigerian Internet users when seeking information between 2017 and 2022. The analysis reveals that the desire to learn and understand loan applications began to increase in 2018 , as well as the desire for quick money. The data, however, indicates that turning to banks for urgent cash can be more effective than using loan applications. This also applied to loans. The data also shows that in 2019, internet users in Nigeria who needed emergency money and wanted to borrow would have approached the apps for their needs. A small but noticeable disparity was seen in the data for 2020.

Data shows that during the year, internet users who wanted to borrow met their needs through apps rather than going to banks. Meanwhile, the close relationship that existed between cash interest and banks suggests that netizens went to banks to withdraw their money or borrow from banks. Our data also shows that the information-seeking pattern displayed by internet users in 2018 is no different from what was seen in 2022, where interest in cash and banking was slightly aligned while interest for loan applications was remote.

Exhibit 1: Information Seeking Behavior of Nigerian Internet Users in the Context of Credit and Lending

Source: Google Trends, 2022; Information analysis, 2022

Like political leaders, business leaders want to help people who need financial help to have the necessities of life. Borrowers are usually informed of certain guidelines, conditions and rules when the money is made available through the apps. Based on the book by Shoshanna Zuboff The Age of Surveillance Capitalism, this shows how willing lenders are to provide borrowers with a positive shared future. In other words, by providing quick access to the money they need, mobile loan companies help Nigerians achieve their desired future as soon as possible. In some cases, some of the companies specifically state that unsecured loans will be given, according to our verifications. “In reality, all you have to do is register by providing your personal details. After registration, you can borrow as low as N1,000 or up to N200,000 with considerable interest,” underlines part of the terms and conditions of one of the applications.

Although it is possible to argue that the borrowers have entered into a legal agreement with the companies based on the agreed loan repayment terms, it is instructive to note that the collection, aggregation and automatic contact with personal contacts of borrowers for the purpose of alerting relatives, co-workers, family members and friends when borrower default equated to a destructive common future, is common practice. This, according to Zuboff, is non-contractual. Therefore, the shared future that Nigerian money lenders have promised in their many marketing and communication materials is being violated. Failure to disclose the use of personal connections to make the repayment amounted to embarrassment and reputational damage to the borrowers.

Exhibit 2: Mobile loan apps in the midst of Shoshanna Zuboff’s era of surveillance capitalism

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