According to Chijioke Dozie, co-founder and CEO of Carbon, one of Nigeria’s licensed digital lending platforms, many Nigerians use loan sharks because they don’t know the difference between regulated and unregulated lenders.
According to him, when it comes to loans, many people are only interested in any platform that can give them money and don’t care whether or not the loan app is regulated.
While acknowledging that the loan sharks challenge is a global issue because there are always people who want to prey on vulnerable people in every society, Dozie stated that knowing the difference between regulated and unregulated platforms would deter many people from patronizing those who would blackmail them to retrieve loans.
To address this issue, Dozie stated that the Central Bank of Nigeria (CBN) would need to embark on financial education to inform Nigerians about the risks of taking loans from unlicensed operators.
What Carbon CEO is saying
Speaking on the menace of loan sharks in an interview with Naijaonpoint, Dozie said:
This is an issue that is happening across the world. And this is because there are people that will always want to prey on vulnerable people in every society. If you look at India, for instance, the country recently shut down over 100 Chinese apps. The Reserve Bank of India is also tackling this problem. So, this is not unique to Nigeria.
The reason this continues to be a challenge is that Nigerian customers don’t differentiate between a regulated lender or bank versus a non-regulated lender. They just want money. For instance, If I want N200,000, my concern is who is willing to give it to me. I don’t care whether regulated or not regulated.
This is also a problem for us that are regulated because people see us as the same as the loan sharks. We’re regulated, we have to go through CBN examinations and we do CBN returns every year. As a regulated lender, before we give out loans, we have to check whether you are credit-worthy or not through the credit bureaus. A lot of these unregulated guys aren’t doing any of these things, he stated
So, I think what the regulator can do to help us is financial education. We need a lot of financial education for Nigerians to understand these things and know the difference between regulated lenders and loan sharks. With financial literacy, we will not totally eliminate loan sharks but hopefully, we will reduce the incidences in the future, he added.
