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One of the most thriving and commonly developed fintech apps in Nigeria is the digital lending apps or personal loan apps, making it easier for Nigerians to access disposable income especially when broke and in need of urgent cash, but the abuse on part of both players; the users and the app owners is becoming worrisome.

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They are strewn all over the app stores, prodding users to take one form of a loan or another to fulfil immediate financial needs. Owolabi Jaiyeola, a financial expert says it is a two-edged sword.

He says “While these apps are there asking users to take loans, the danger is that they may not be licensed and may go above the Central Bank of Nigeria’s approved interest rate.” At the last count, over 20 loan apps are in the Google Play Store.

These apps, in the absence of a well-structured eco-system, rely on phone records of customers to ascertain their creditworthiness. They do this by scouring smartphone data including call logs, contact lists, GPS data, and texts, users can look beyond traditional banks to access credit. But there’s just one problem. There’s growing evidence that the ease of access to quick, digital loans is leading to a growth in personal debt. And as lending apps jostle for market share and revenue from interest payments, there are fears they will inadvertently nudge users towards indebtedness and poor spending choices.

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