Loan Apps Without Collateral: How Borrowers’ Phone Contacts Became Their Ultimate Collateral!

The common slogan “loan apps without collateral” often paraded to deceive unsuspecting borrowers that the online lending platforms do not require any collateral security or document to process a loan for individual and business borrowers is a ruse and bait to entangle you into their evil net and “den of captivity”.

Collateral is money or property which is used as a guarantee that someone will repay a loan. Many people use personal assets as collateral for small business loans. However most people in Nigeria cannot borrow from traditioanl banks because they lack collateral to stand in. As a result the evolution of digital banking and online lending platforms without demanding collateral simplified this process and aparently made borrowing very easy.

However unknown to many Nigerians, the “collateral” which lending platforms get in exchange for peasant credit and soft loans to their customers is a far cry more destructive, debilitating and extremely unreasonable and we dare say illegal in every aspect of it.

The pain and reward for late repayment and default of borrowings from loan apps have led some to commit suicide, go insane and some others lost their humanity. We must stop the loan sharks in Nigeria, in Africa and anywhere on the planet from these unethical and illegal loan recovery practices.

Read this article and understand how your loved ones’ phone numbers, your family members and friends’ contact information and pictures and banking details are being used to ultimately secure, and in event of default recover any soft loan you obtain from these loan sharks masquerading as online banks. And what you can do to stop them!

The post pandemic era witnessed the advent of many digital lending platforms and loan apps in Nigeria and many countries across the globe. One of the greatest hyped feature of these loan apps and online lending platforms is that they operate and give out credit to customers without needing collateral, documents or physical presence as often demanded by traditional banks.

Due to this novel functionality, many Nigerians turned these digital banking platforms that promise quick and instant cash to their darling avenue whenever they face cash emergencies. The mere knowledge that you can easily approach a relatively known or completely unknown online platform and get cash within few hours if not minutes made loan patronage a seamless affairs. With this many Nigerians jettisoned the traditional banks with all its bureaucracies, collateral and documentation.

The ability of securing instant credit within minutes just after a few clicks on a loan app or a digital lending platform, and particularly without collateral or any form of documentation made these  lending apps and online banks a darling of many people. It’s a not just a great excitement but a revolutionary innovation to know that you can access instant cash of say N50,000 or N100,000 at the corner of your room within a few clicks on your mobile phone without visiting any bank and without any physical correspondence.

How Phone Contacts Became The Ultimate Collateral In Event Of Repayment Default By Borrowers

What borrowers and indeed many Nigerians did not know, however, was that the hundreds or thousands of contacts (as the case may be) discreetly stored on their mobile phones or smart phones whether Android or Apple was the ultimate collateral in case of default for the various loans they have accessed.

The numbers stored on their phones and accessed by the loan apps in Nigeria, were the lenders’ insurance, guarantees and indeed collateral against any inability to repay or repayment defaults of any kind. In essence, borrowers’ reputation and dignity or whatever was to be left of it was to be used in guaranteeing and securing repayment of instant loans in event of default.

See below how a customer by name Isaac Ojo Obisesan was grossly humiliated by a loan app in Nigeria for defaulting his repayment as at when due. What collateral could have been more than this for any digital lending platform? Isn’t this enough to force repayment by a defaulter if only to avoid the gross shame, ridicule and defamation associated by a phony loan app all out to secure its loan disbursement?

Stop Loan Apps From Accessing Your Phone Contacts
What collateral could be more than the various contact details of this loan customer?

Can You Then Stop Loan Apps From Accessing Your Phone Contacts After You Have Borrowed Money From Them?

The truth is that your contacts “safely stored in your mobile phone” which you used in downloading the loan app and securing the lending from the app platform, is actually “your collateral and guarantee for loan repayment.” If you want to apply for a loan and you do not have any contact in your phone, we assure you that no lending app in Nigeria will approve your request.

So in essence you cannot stop any loan app in Nigeria and anywhere for that matter, from accessing your phone contacts, after you have applied, hit confirm and borrowed money from them. Your phone contacts will immediately be downloaded safely on the loan app’s external database against your name, BVN and other profile details and even though you later delete or uninstall the loan app, it makes no difference. You stand in their mercy.

But you can still stop them from further accessing your phone contacts and other details you have granted permission to.  To do this, simply scroll down to app permission and stop loan apps from accessing your contacts, sms, photo gallery and storages on your phone, they won’t be able to reach out to your contacts anymore or post your pictures. They would only have your number and have only you to deal with.

It could be a business partner, your customer or your client base, or even your family members, your loved ones and group members including hundreds and thousands of other people a person/customer would not want to get humiliated or threatened in their presence (because of loan default), but this, was the ultimate card the loan apps in Nigeria counted on to get repaid in case you defaulted. Their weapons are actually your humiliation, defamation, threats and public shaming, and the lending apps do these to you and to all your valued contacts including your family members to get paid back their loan.

If you are not sure of repaying a loan, as at when it will be due, please kindly do not make the mistake of collecting the loan.

Your only guarantee or tool to prevent or stop loan apps from accessing your phone contacts is to not download their apps on your phone and to not collect their loan at all. You already signed in and “approved your contacts for their database” once you hit loan approved on your phone.

Borrowers Recount Humiliating Ordeal From Loan Apps Accessing Their Phone Contact List In Nigeria After Default

“It is not a good experience,” said Jane, who defaulted on a loan. After the lender reached out to her phone contacts, to console herself, she said in a mixture of Pidgin and English; “Who no dey borrow? Even Nigeria dey borrow, it is a normal thing. But they should have focused on me paying their money and not reaching out to my contacts.” While she may have been humiliated beyond her imaginations, the psychological impact was a feeling of nothing else to lose.

“Shame! Shame! Shame!” as may be recalled by Game of Thrones fans, was the chant as Cersei, the Queen Mother, was paraded through the fictional town of King’s Landing, as atonement for her ‘sins’. The same can be replayed, when hundreds or thousands of numbers on a person’s phone are contacted, all in a bid to shame a borrower into loan repayment.

“I was broke then and under pressure to settle certain things,” said Chidi, who borrowed N10,000 each from three of such apps in mid-2021, a total of N30,000 ($72) but defaulted after the 2-week tenor. This led to a tsunami of messages and calls, first to threaten him to repay, then to all his phone contacts. He identified iCoin as one of the apps but couldn’t recollect the others when interviewed.

“Christmas is over, if you know you borrowed money from any digital lending App, biko (i.e. please) go and pay back. I don’t want to receive unnecessary messages because of you. Walahi, I go carry them come your house,” wrote Collins Nnabuife on his Facebook page, intended as a joke but also a portrayal of the current reality many live through. Not only for those who have borrowed, but their phone contacts who are harassed with threatening messages, even when they were never used as guarantors for the loan.

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How Loan Apps In Nigeria Are Flouting Google Policy On Finance Apps And Nigeria’s Local Lending Laws

While the apps mostly claim the lowest loan tenor is 91 days, in order to ‘pass’ Google playstore requirement for the apps to be hosted, all as recounted by ‘victims’, actually offer loans from seven days.

“We do not allow apps that promote personal loans which require repayment in full in 60 days or less from the date the loan is issued,” states Google on a web page on conditions for Financial Services apps. “We don’t allow apps that expose users to deceptive or harmful financial products and services,” it also says.

Christmas is over, if you know you borrowed money from any loan App, biko (i.e. please) go and pay back. I don’t want to receive unnecessary messages because of you

Digital lending apps are required to indicate minimum and maximum period of repayment, maximum annual percentage rate, and other information, which most either misrepresent or omit. In particular, by offering loans of just seven days, for instance, these providers clearly flout a major criterion by Google that no tenor should be less than 60 days.

I’ll Never Borrow Money From FairMoney Loan App Again, They’re A Loan Shark — Single Mother

A Google spokesperson, when asked for the company’s reaction to conducts of loan apps hosted on playstore, was quoted as saying the company has very strict policies that guide apps that are allowed on the Playstore platform. “When we find violations, we take very strong actions, including sometimes taking down the app from our platform. Violations can be reported by clicking the ‘Flag as inappropriate’ link under the menu on the Google Play store. When reports are received, We investigate, and take clear actions,” Google said.

Apart from violating the terms by Google playstore, the digital lending apps have also been alleged to contravene Nigeria’s data privacy law on one hand, and cyber security law on the other.

When Soko loan, one of the loan apps was fined N10 million by NITDA, it was hinged on complaints by users who accused it of breaching their privacy and defaming them by reaching out to their phone contacts.

“This action was taken after receiving series of complaints against the company for unauthorised disclosures, failure to protect customers’ personal data and defamation of character as well as carrying out the necessary due diligence as enshrined in the Nigeria Data Protection Regulation,” NITDA said in August, 2021. Months later, the action taken against Soko loan has not deterred other loan apps from similar practices.

Loan Sharks And Illegal Lending Platforms In Nigeria Continue To Terrorise, Threaten And Defame Nigerians After FCCPC Ban

Even after the FCCPC reportedly shut down operations of many of the defaulting loan sharks and
frozed the accounts of 30 loan apps in Nigeria as we reported on March 30th this year, and further reported frozed bank accounts belonging to another 50 loan apps in Nigeria, the sharks in this lending platform still continue to public shame its customers and borrowers. FCCPC and other regulatory authorities should unmask these evil lending platforms and prosecute them for gross violation of customer data privacy and defamation of Nigerians.

Frequently Asked Questions: How You Can Stop Loan Apps In Nigeria From Accessing Your Phone Contacts?

We have attempted to answer a few common questions on how you can stop loan apps from accessing your phone contacts. Why the answers are not direct, they are situational and based on what previous actions you have taken.

1. Can You Stop Loan Apps In Nigeria From Accessing Your Phone Contacts?

The simple answer to this question is a NO! Provided you have once downloaded the loan app and have collected a loan from the platform. You can no longer stop the loan app from accessing your phone contact because it is already safely stored in the app’s external database. Even though you later uninstall the app, it is still with them. The best you can do is stop collecting their loan and repay any outsanding loan to avoid any further harrassment, threat or blackmail.

2. How do I get loan apps In Nigeria to stop calling my contacts? How do you stop loan apps from accessing your phone contacts?

To stop loan apps from accessing your phone contacts or calling your contacts and family members, do the following:

  1. Don’t download any loan app on your phone.
  2. If you have already downloaded a loan app, don’t approve or collect any loan from the platform.
  3. If you have already collected a loan from the platform, delete and uninstall the app immedialy from your phone and do not reinstall or collect any further loan from the credit platform.
  4. Only download and patronize reputable loan apps that will not send shame or defamatory messages to your contacts, even if they have your phone contact access.

3. Can a loan app access my contacts if uninstalled?

A loan app cannot access your contact list if you already uninstalled the app from your phone. However it’s likely your contacts have been downloaded and stored in the app’s database outside your phone if you ever collected a loan from them. To stop loan apps from accessing your phone contacts again, safely uninstall the app and do not patronize them anymore.

4. Can loan apps come to my house?

A loan app cannot come to your house. However if you already downloaded their app and collected their loan, they can access your contact list, databases, BVN, profile details and can report you to the credit bureau and blacklist your name against your BVN if you default on your loan. To stop loan apps from accessing your phone contacts again, safely uninstall the app and do not patronize them anymore.

5. How do I stop messages from loan apps?

To stop messages from digital lenders or stop loan apps from accessing your phone contacts again, safely uninstall the app and do not patronize them anymore. Also if you are owing any outstanding loan, pay down and let the app be aware that you have paid your loan to update your records.

6. How to stop a loan app from accessing your contact?

  1. Don’t download any loan app on your phone.
  2. If you have already downloaded a loan app, don’t approve or collect any loan from the platform.
  3. If you have already collected a loan from the platform, pay back any outsanding balance, delete and uninstall the app immedialy from your phone and do not reinstall or collect any further loan from the credit platform.
  4. Only download and patronize reputable loan apps that will not send shame or defamatory messages to your contacts, even if they have your phone contact access.

7. Can Denying Loan Apps Permission Stop Them From Calling or Messaging Your Contacts?

YES. Once you deny a loan app permission to access your contact list, you automatically stop them from accessing, calling or messaging your contacts. However if you deny any lending platform permission from accessing your contact, your loan will NOT be approved and you won’t get any funding from the loan app. So you have to decide on which one is more important to you.

8. How Do I Prevent Fake Loan Apps Like Sokoloan, LCredit and others From Calling Or Messaging My Contacts?

To stop loan apps from accessing your phone contacts generally or specifically stop scam platforms like Sokoloan or LCredit from messaging your list, do not download their apps on your phone. Do not approve or collect any loan from them. Do not give them permission on your phone to access your contacts. That essentially means you cannot have access to collect their loans.

Do You Need Reputable And Reliable Loan Apps For Quick And Emergency Cash?

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In need of an instant loan or an emergency cash loan in Nigeria? You can apply through any of the top loan apps in Nigeria and get funded under a few hours, a few more hours without collateral or document needed of our list of reputable loan apps in Nigeria.

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If you need apps that let you borrow money instantly, these 14 cash advance apps will be very useful.

These Top 10 Best Instant Loans No Credit Checks Guaranteed Online Approval are also highly recommended.

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About the Author: Femi Adeoya

Mr Femi Adeoya is a Chartered Forensic Accountant and a Certified Fraud Examiner. He has over 20 years professional work experience in accounting, finance and business management processes. As an Accounting Software Expert, he has implemented and supervised accounting solution set up of over 50 small and medium businesses in Nigeria. As a passionate blogger, Mr Adeoya is an ardent writer and communicationist. He is the CEO of QUICK LOAN ARENA (, the number 1 loan apps review website in Nigeria. He is very passionate about the quick and instant loan industry in Nigeria and has written over 200 reviews on different loan apps and digital banks in Nigeria, USA, Canada and UK.

1 Comment

  1. What can be done when a loan app sends a message that someone that u might not even know collected a loan and that the person has become fraudulent?That they are messaging u to tell u and that if the person doesn’t pay up…they will send ur picture and that of the person owing on different platforms

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