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You probably have received a text from a loan company stating that someone borrowed money & didn't want to pay back. Many atimes they use unpalatable language which could be irritating. I definitely have received a few before, myself. A Thread... @OmoKakafiala @Dolarpo
While these loan coys should be more decent in approach, I am of the view that it's done out of desperation. I co-own a coy that gives out loans and I bet it is so tempting to want to do anything to get one's funds back. @olabode_metals
Even with best efforts at undertaking due diligence, things still seem to go wrong and shockingly, quite a number of people who owe as little as N200k, would rather spend money getting a lawyer than paying back such sums. I speak from personal experience, here.
In fact, I had since formed the view that it is becoming a cultural thing to want to borrow without intending to pay back. The trend now is to obtain residency outside Nigeria, borrow money from a bank or loan company with the intention of leaving the country.
Usually, when such a person leaves the country, you never can reach them and neither will they ever reach out or offer repayment. I am speaking from personal experience here too!
Whilst it could be irritating receiving text messages from loan coys, if tables turned, maybe many of us will act much less decently to recover our funds. I also think the commonality of loan repayment defaults suggests that cheap credit is a distant thing in Nigeria.
This is so, because in financial modelling by such coys, repayment risks will be factored in determining interest rate, as, if you believe 30%-50% will default, you then have to look at high interest rates to match the risks.
If someone had borrowed money from you before, especially what you consider substantial sums & refused to pay for several years only for you to get a letter from that person's lawyer, claiming high interests rates, inter alia. Never palatable!
Many Will make all sorts of promises and even drop security, only for them to go to court if you want to enforce security. It is just crazy out there and you may need to be crazy, at least in Nigeria, to get results!
One aspect that is also tough is lending to family and if you can afford it, gift them funds, maybe much lesser than they ask for; otherwise, it will usually end up as a bad situation! No particular structure to all I have said, just my random thoughts from personal experience!
The foregoing are my thoughts from personal experience running a lendinh business. I do not seek to indict anyone or support poor corporate culture or indecency in approach to issues. Thanks!
