Nigeria: Predatory Money Lending in Nigeria: Examining the Threat of Usurious Lending to Data Privacy Concerns
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Money is essential to facilitate virtually everything, including financing the growth and development of businesses. To meet the needs and demand for money, lending has evolved with financial institutions, especially banks, offering large-scale credit facilities primarily for investments and related matters. This then expanded to include low-income people who wanted to buy essentials such as cars, refrigerators, televisions, generators, etc., and meet other personal needs. Eventually, cash lending evolved beyond line of credit loans to acquire consumer goods from manufacturers, homeowners, distributors or retailers for which payment was made in installments or deferred to a future date. .
The outbreak of the COVID-19 pandemic has put many Nigerians under economic pressure, forcing many to obtain personal loans from digital platforms offering unsecured loans. Because of this, individuals bowed to other means of survival, and some, unfortunately, got stuck in the network of predatory money-lending applications. These fraudulent and predatory digital loan apps lurk like platforms where you can access fast unsecured loans. However, they require a plethora of data such as the applicant’s Bank Verification Number (BVN), name, permission to take photos and video recordings, access to location, contacts, media and to files on devices.
This article will cover money lending and loan sharking and money lending regulation in Nigeria, especially as it relates to digital money lenders. The article will also assess the position of the data privacy law, analyze data privacy issues vis-à-vis the threat of predatory lending, and give recommendations on how to achieve a balance in the lending process. ‘money lending space.
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