Quick loan platforms disregarding limit rules — CBN warns
Central Bank of Nigeria (CBN) says most quick loan platforms and companies are disregarding its rules on limit of exposure of customers.
Daily Trust in a recent report quotes the Apex Bank as saying that over 10 years ago, it has given instruction that no lender should give a loan to a customer of which the monthly repayment is over 33 p er cent of the monthly earning of such customer.
According to most of the customers of the quick loan platforms interviewed in the Newspaper report, they (the customers) are the ones to tell the lenders their net income. The lenders do not have the luxury of time to verify independently what the net disposable incomes of the debtors are before crediting their accounts.
According to Section 14.1b of the CBN prudential guideline for deposit money banks in Nigeria, which became effective May, 2010: “Banks shall ensure that the total monthly amortization payments of consumer loans, inclusive of housing loan, should not exceed 33.1/3 per cent of the net disposable income of the prospective borrower.”
The interpretation of the above provision, Quick Loan Arena understands, implies that if a consumer takes home N100,000 as net income in a month, his or her loan deduction cannot exceed N33,300 per month.
A senior management official at the Consumer Protection Department of CBN was quoted as saying: “It is obligatory for individuals and companies to study and understand the terms and conditions of a loan offer to assist them in choosing loan offers that are best suited to their financial capabilities and needs.
“It is important to note that all loans taken will be repaid according to the terms and agreements.
“We have regularly advised that individuals should not take loans from unlicensed individuals and institutions (loan sharks) to avoid running into financial difficulties.”
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