Okash, Palmcredit, Sokoloan and some loan apps in Nigeria have devised new means of defrauding loan seekers, and this is affecting the credibility and longevity of loan-focused Fintech startups within the country.
Some users of these loan apps have began to uninstall loan apps following financial loss to these creditors.
Although TopNewsNaija reports that some of the loan agencies have gone to the extent of rebranding or having a subsidiary.
The deteriorating relationship between commercial banks and ordinary Nigerians gave rise to Financial Technology (Fintech) platforms that offer credit to individuals through mobile phone, thereby, cutting the difficult process of acquiring loan.
Loan apps became even more popular in Nigeria due to their unique selling point of providing credit for loan applicants within five minutes without collateral, cumbersome paperwork process and unnecessary charges, as well as offering competitive interest rate.
While this is a good innovation to small businesses, middle class and low income earners, it is not enough to sustain their (Fintech) growth or obtain loyalty within the underserved population, as AllNews findings showed these loan apps are quickly losing ground among the underserved population, with their popularity being clouded by fraudulent activity.
See How Okash, Palmcredit, Sokoloan Are Extorting Loan Seekers
Creditors are quick to offer loan seekers loan, but when it comes to repayment, getting through to some of these Fintech companies becomes almost impossible. The loan apps offer credit to applicants on a tenure period, with an interest rate that rises once debtors fail to repay on the due date.
For every day that passes without payment, the interest rate on the loan increases for debtors. But the problem is, not all debtors are unwilling to pay before the due date, as loan apps have made people think. For those ready to pay before the due date, access to Palmcredit and Sokoloan becomes difficult for many, even despite loan seekers turn on their auto-debit, just incase they forget.
While the inability to reach these creditors favour loan apps, it is a form of defrauding debtors. In order to double the fee debtors will pay back, Palmcredit and Sokoloan make it almost impossible for some debtors to contact them before and after due date – thereby, debtors have to pay more than they initially should.
Loan Seekers Lament Their Experiences With Loan Apps
Palmcredit Method: Findings showed that debtors stormed the Palmcredit app to complain of their challenge in paying back their loan before the due date. The loan apps get to make more profit from loan with late payment, and they do this by ignoring debtors’ quest to pay on time. In November, loan seekers have sent several complaints regarding this tactic used in defrauding them.
Palmcredit Is A Poster Boy Of The Tactic
One of Palmcredit loan applicants, Magaret Bamidele, said, “This is the worst app I have ever used. I have tried to repay my loan through online repayment method since yesterday but is still pending and palm credit still continued to add interest to it.
“Please try and close down if you know you have no the qualities it takes to be a financial institution instead of stylishly defrauding the masses with your worst repayment app and method. You guys should know that I will not pay the interest added after you put my repayment on pending.” Bamidele said.
Another complaint, Marvel Steve, stated that, “This is worst credit app I have ever seen, my loan is due since Saturday and I tried to pay but kept pending my transactions and adding charges for late payment meanwhile is not my fault but yours,
“I have no option but to use offline repayment but only for them to start calling me this morning to repay my loan which I have done via offline repayment. If you people like update my status or leave it but If i receive any call from you again we meet in court.”
According to Catherine John, she complained that, “I have been trying to add my card details in other to make timely repayment of loan taken but it hasn’t gone through, for days now. I will not take lightly being charged extra 2.5% for late payment, because I want to pay now.
“Please get your app in other. Why do you have to stress your customers unduely… How can this repeat itself again in 2020 Please fix your app I won’t pay a late fee. I want to repay on time and it’s not going through.” John lamented.
Palmcredit Also Prolong Due Date To Increase Interest Rate For Unsuspecting Applicants
Meanwhile, for another user, who simply identified himself as Hardcastle, the case is different, as Palmcredit extended his due date longer than he chose. Note that the longer the due date, the higher the interest rate. While sharing his experience, he stated that, “CBN should be very vary of these set of deceitful mobile loan companies in Nigeria, with fraudulent tendencies.
“I was called by Palmcredit for a discount loan available for me, I rejected the offer twice, I was called the 3rd time, at the time I was short of funds temporarily, I opted in cos I could payback in 1week.
“The app gave options of payback plans to be 2/3/4 months as available payback period with various interest. I selected 2 months because I couldn’t get 1 month option and I wanted to pay back in 1 week. I got the loan, in 5 days time I went back to the app to make payment.
“After Opening the app I realized they have made it 4 months payment plan with more interest. I tried to reach them online, but it wasn’t working. It appears they noticed, I got a call from them few days later, reminding me of my loan. I asked, the agent gave me their CC line.
“I called the customer care line, I did explain the situation, and I was told there is nothing they can do, that the selection of 4 months payment plan is automated, even if I selected 2 months, I said that was deceitful, I thought they would do something about it.
“To my greatest surprised, they refused to do anything about it, now am been forced to accept terms of payment I never bargained for, with serious of threats and demand notices. Am going to pay for what I didn’t bargain for because I used PalmCredit. Guys be careful.” He warned.
Hardcastle told AllNews that despite his effort to resolve the issue with Palmcredit, their customer care agent have been rude and doesn’t think Palmcredit is ready to find solution to his problem.
“They have consistently been rude over the phone, I doubt they have the requisite expertise or due care to respond reasonably. I never knew they could do such, I never knew that’s been their way, what got me angered, was the threats, instead of you to respond to the issues, they were busy Threatening. It appears that was an easy way to go for them.”
Palmcredit claim their loan tenure is automated, but yet give loan seekers option for due date when applying, only for the loan seeker to realise when trying to repay, “How can you say the system is automated, when you actually provided options to select from?
“That irrespective of what you select, the system will still select what you have programmed unknowingly to the person collecting the loan, you get to know only when you want to pay the first installment that what you selected is not what is in your profile for payment. It’s pathetic and sad.” Hardcastle told AllNews.
Sokoloan Method: According to one of Sokoloan user, Destiny Nebechi, she said, “The only good thing with this app is the prompt response when u want to borrow but to make repayments and for the customer care representative that doesn’t pick calls and insult people anyhow it’s a big NO to this app. You will get insulted and have ur line blocked.” she lamented.
Another Sokoloan user, Ruby bethel, said, “I must say your customer care service is very very poor, I’ve been trying to pay back the loan i collected with app for more than four days now is not working. all the customer’s service numbers are switched off.
“And i can’t make transfer from my phone. please stop sending messages of how you want to embarrass me and deduct your money from my account now so that i can unstall the app. your services regarding loan payment is poor.”
The experience is same for Ngozi Ijeoma, who was deducted despite her effort to repay on time, “Am highly disappointed with the staff. There are laxity in them. Pay your loan through transfer in time, it will not be cleared.Call them to pick is something else. Even as that it will not be cleared upon their interest rates is high.
“I paid my debt this morning before 7am which is due date through transfer. Called all lines, switched off. Mailed the debit alert to them. Mail acknowledged, they still have not cleared the app rather went and withdrew money from my account this money.”
Okash Method: According Doris Akinleye who put her debit card on auto-debit via the app disclosed that even at the due date, Okash and affiliate of Opay refused to deduct their money, only to call few days later, lamenting of my non-repayment.
Another loan seeker said; “Okash abi Opay no be am at all, they themselves are thieves. How do you expect one who doesn’t have 10,000 to be 40,000. Even when they call and you try to explain that this and this happened, their call agents will be as aggresive as a mad dog”.