Borrowers Allege Data Abuse, Harassment From Loan Apps Amid High Repayment Default

Borrowers of digital loan apps in Nigeria are accusing lenders of harassment and misuse of personal data in recovering overdue loans, even as defaults in the sector rise.

Some borrowers allege that after missing repayment deadlines, lenders called or sent messages to relatives, friends and other contacts in their phonebooks, telling them they owed money.

The claims have not been tested, and the borrowers did not name the lenders involved.

The complaints come as OPay, one of the biggest players in the market, disclosed in its registration statement filed with the United States Securities and Exchange Commission (SEC) that it wrote off $113.15 million in loans as uncollectible in the first half of 2026.

The figure is 520.5 per cent higher than in the same period of 2025 and exceeds the $69.95 million written off throughout 2025.

OPay also reported that $113.80 million in outstanding loans and interest was overdue as of June 30, 2026, or 27.4 per cent of its $415.33 million loans and interest receivable.

The disclosure by digital financial services company OPay that it wrote off $113.15 million in loans as uncollectible in the first half of 2026 has raised fresh concerns about rising defaults in the digital lending market, particularly as millions of Nigerians increasingly depend on loan applications to survive the country’s harsh economic realities.

The figure contained in OPay’s registration statement filed with the United States Securities and Exchange Commission (SEC) ahead of its proposed public listing, represents a 520.5 per cent increase over the corresponding period of 2025.

The six-month write-off also exceeded the $69.95 million recorded throughout 2025, highlighting the growing credit risks associated with the company’s lending operations.

However, the geographical origin of the $113.15 million debt remains unclear, as OPay has not explicitly verified that the entire amount originated from Nigerian borrowers alone.

Findings show that OPay operates in Nigeria, Egypt, Pakistan and Indonesia, with Nigeria serving as its core market for payments, digital wallets and lending. While its Egyptian operations focus on merchant acquiring, Pakistan supports merchant acquiring and consumer wallets, while Indonesia’s operations include loan facilitation.

The company’s financial disclosures indicate that its Nigerian lending business operates on a self-operated model, while its Indonesian lending activities principally involve facilitating loans funded by third-party lenders. The difference in business structures could affect how credit losses are recognised in its consolidated financial statements.

Consequently, although Nigeria’s substantial contribution to OPay’s lending business makes it a significant market in the investigation, the $113.15 million write-off cannot be conclusively attributed to Nigerian borrowers without a country-by-country breakdown from the company.

The scale of its Nigerian lending operation is, however, evident in the figures. OPay originated $927.63 million in new loans in Nigeria during the first half of 2026, while its quarterly unique Nigerian borrowers increased from 3.5 million to 6.7 million.

Its lending income reached $236.12 million during the period, while $113.80 million in outstanding loans and interest was overdue as of June 30, 2026, representing 27.4 per cent of its $415.33 million loans and interest receivable.

The figures provide a glimpse into the growing risks confronting digital lenders as they expand access to unsecured credit. They also raise questions about the affordability of short-term loans, the quality of credit assessment and the financial consequences for borrowers who struggle to meet repayment deadlines.

However, for many Nigerians, digital credit remained a lifeline amid rising living costs, stagnant earnings and the difficulty of accessing conventional bank loans as these loans have become a survival mechanism.

From salary earners struggling to meet household expenses to traders seeking emergency working capital, digital loan applications have become an increasingly popular source of short-term financing.

 

The appeal lies in their accessibility, speed and relatively limited documentation requirements. Borrowers can apply through their mobile phones and, in some cases, receive funds within minutes without providing conventional collateral.

 

However, the ease of accessing credit often conceals the financial and emotional consequences of missed repayment deadlines.

 

For some borrowers, the experience begins with an urgent need for money but ends with repeated calls, mounting charges and alleged exposure of their financial difficulties to friends, relatives and other contacts.

 

A Lagos-based salary earner, who simply wants to be identified as Chuks , said his experience sometime ago with digital lenders became distressing after he failed to repay a loan on the agreed date.

 

According to him, the initial reminders gradually became persistent calls and messages, while some lenders allegedly contacted people in his phonebook to demand repayment.

 

“I took the loan because I had an urgent family problem. I believed I would repay it when I received my salary, but some unexpected expenses came up. Once I missed the deadline, the pressure became unbearable,” he said.

 

He alleged that some of the messages sent to his contacts disclosed his inability to repay the loan, leaving him embarrassed and emotionally distressed.

 

“They called my family members and people I know. Some of them received messages explaining that I owed money and had refused to pay. It was painful because these were people I had never discussed my financial problems with,” he said.

 

Chinedu said the experience affected his peace of mind, particularly as he became increasingly worried about who might receive the next message.

 

“The worst part was not even the money. It was the fear of who they would call next. I could not concentrate properly, and I became uncomfortable answering calls because I did not know whether it was another person asking me about my debt,” he added.

 

Another borrower, identified as Aminat, said she turned to a loan application to meet an urgent household obligation but struggled to repay after her expected income was delayed.

 

She alleged that the lender imposed additional charges after the repayment deadline and continued contacting her despite her explanation that she was experiencing financial difficulties.

 

“The amount I borrowed was not much, but the repayment became difficult when my income did not come as expected. Every day I delayed, the amount increased, and I became more anxious,” she said.

 

Amina said the situation became particularly distressing when some of her relatives and friends allegedly received messages about her outstanding loan.

 

“I felt ashamed. People who did not know what I was going through suddenly knew that I had borrowed money. I was afraid of explaining myself to my family, and the calls made the situation worse,” she said.

 

She said the experience had made her more cautious about borrowing, although the financial pressures that initially drove her to the application remained.

 

However, for small-business operators, the consequences can be equally difficult.

 

A trader identified as Bola Olawande said she had used digital loans to restock her business during periods of low cash flow, but repayment became a challenge when sales fell below expectations.

 

“Sometimes you borrow because you need to buy goods and keep your business running. You expect to sell and repay, but if the market is slow, you begin to struggle. Before you know it, you are thinking of another loan to settle the first one,” she said.

 

Bola said the pressure associated with overdue loans could affect a borrower’s ability to focus on business and other responsibilities. She further added that while some digital lenders provided useful emergency credit, borrowers needed to understand the full repayment amount and the consequences of default before accepting a loan.

 

 

Speaking with LEADERSHIP, investment analyst Tosin Ige said the growing dependence on digital borrowing was largely driven by the widening gap between household income and expenditure.

 

“Regardless of whether the interest rate environment is high or low, most Nigerians depend on borrowing to bridge the gap between their rigid income and expenses that have gone up due to the high cost of living,” he said.

 

Ige explained that while the cost of essential goods and services had continued to increase, income growth remained comparatively weak, leaving households with limited options when confronted with urgent financial obligations.

 

He said digital lenders had become attractive because they offered quick, collateral-free credit, unlike conventional banks, which generally imposed stricter lending requirements to manage credit risks.

 

“Most Nigerians are attracted to these loans because of the speed and convenience of accessing them without excessive conditions,” he said.

 

However, he warned that the cost of short-term digital credit could push borrowers into a cycle of indebtedness, particularly when they repeatedly obtained new loans to repay existing obligations.

 

“The problem is not that these loan apps exist; the problem is that their monthly lending rate runs into 15 to 20 per cent, while annualised rates can run into over 100 per cent,” Ige said.

 

According to him, some borrowers were already caught in a debt trap because fresh loans were increasingly being used to service previous debts rather than address the original financial needs.

 

He said addressing the problem required broader economic measures capable of improving productivity, expanding income-generating opportunities and reducing the pressure on households to rely on expensive short-term credit.

 

Similarly, Fintech analyst, Akeju Abiodun said demand for digital loans remained strong because the underlying need for short-term liquidity had not disappeared, although borrowers and lenders were becoming more cautious.

 

“The demand has not disappeared because the underlying need for short-term liquidity remains. What has changed is that borrowers are becoming more cautious about the platforms they use, while lenders are becoming more selective about the customers they are willing to finance,” he said.

 

Abiodun explained that borrowing among households and small businesses was often driven by cash-flow challenges rather than unnecessary consumption.

 

“People do not necessarily borrow because they like borrowing. They borrow because their income and expenditure cycles do not match. When salaries, business revenue or daily income are insufficient to cover immediate obligations, digital credit fills the gap,” he said.

 

He, however, warned that the convenience of obtaining loans could become dangerous when borrowers started taking fresh loans to repay existing ones.

 

“The real danger begins when short-term credit becomes a permanent source of household income. At that point, the borrower is no longer solving a temporary liquidity problem; he is managing a structural income deficit through debt,” he added.

 

While accounts of data abuse and aggressive recovery have continued to raise concerns which are far beyond the cost of credits in Nigeria’s digital lending market.

 

Some borrowers have alleged that lenders use personal information collected during loan applications to contact friends, family members and workplace associates when repayment is delayed.

 

The allegations raise questions about the extent to which digital lenders use information obtained through mobile applications, particularly phone contacts and other personal data, in pursuing overdue loans.

 

 

Financial expert, Ibrahim Audu said the expansion of digital lending should not come at the expense of borrowers privacy and financial security.

 

He said legitimate lenders were increasingly expected to operate with greater transparency, while regulatory oversight was tightening around operators accused of violating consumer rights.

 

“The industry is being forced to recognise that access to a customer’s phone contacts or personal information does not give a lender unlimited authority over that customer. Credit recovery has to remain within the boundaries of consumer protection and privacy,” Audu said.

 

He added that lenders had stronger incentives to document lending terms, protect customer information and adopt formal recovery procedures, as regulatory sanctions and reputational damage could affect their operations.

 

However, the challenge remains that borrowers may not always distinguish between legitimate repayment reminders and unlawful intimidation, particularly when dealing with digital platforms whose ownership, registration status or complaint channels are unclear.

 

An advocate for accessing credit, chief executive officer of Mathesis Analytics, Winston Osuchukwu canvassed for the Personal Equity concept that would allow borrowers to leverage their repayment history, savings consistency and transaction records to establish a more comprehensive and portable measure of creditworthiness.

 

With the borrowers financial behaviour helps shaping and improving their credit access as consistent loan repayments, savings behaviour, BNPL transactions, telco usage and utility payments can provide a more complete picture of creditworthiness, with an aggregated financial records enabling borrowers to secure better credit terms from institutions with which they have no previous relationship.

 

 

Meanwhile, regulatory agencies strengthening their oversight due to the growing complaints have drawn increased attention from the Federal Competition and Consumer Protection Commission (FCCPC), which has intensified oversight of the digital lending industry over allegations bordering on unfair lending practices, harassment, privacy violations and improper debt recovery.

 

The Commission’s Digital, Electronic, Online and Non-Traditional Consumer Lending Regulations 2025 provide a framework for digital lenders and seek to promote transparency, accountability and consumer protection.

 

The regulations require lenders to disclose applicable interest rates, fees and repayment terms, comply with relevant data protection obligations and meet registration requirements.

 

The FCCPC has also maintained that digital lenders must not engage in practices that undermine consumers’ dignity or violate their rights in the course of recovering debts.

 

However, the regulatory framework faced a legal challenge in 2026, following a suit by the Wireless Application Service Providers Association of Nigeria (WASPAN), which questioned the Commission’s authority to regulate certain aspects of digital lending.

 

The FCCPC subsequently announced that the Federal High Court had dismissed the challenge and discharged the restraining order, allowing the Commission to resume enforcement of the regulations.

 

The Nigeria Data Protection Commission (NDPC) also has a role in addressing complaints involving the unlawful collection, processing or disclosure of borrowers’ personal information under the Nigeria Data Protection Act 2023.

 

The law establishes obligations around lawful processing, transparency, purpose limitation and the protection of personal data. These provisions are particularly relevant where borrowers allege that information supplied during loan applications was subsequently shared with third parties without lawful justification.

 

Similarly, the Central Bank of Nigeria (CBN) maintains consumer protection requirements for financial institutions under its regulatory supervision. Customers with complaints against regulated financial institutions are expected to first seek resolution from the institution before escalating unresolved matters through the Bank’s consumer protection channels.

 

Meanwhile, legal expert, Taiwo Olatunji said that borrowers are urged to preserve evidence of any data breach or harassment by loan sharks.

 

She stated, “Borrowers experiencing alleged harassment or unlawful disclosure of personal information should preserve evidence before seeking regulatory intervention”

 

While noting that nature of the complaint would determine the appropriate agency to approach, adding that consumers should distinguish between a legitimate demand for repayment and conduct that violates their rights.

 

“A lender is entitled to seek repayment of a lawful debt, but that right does not extend to threatening a borrower, exposing personal financial information to unrelated third parties or using unlawful methods to compel payment,” Olatunji said.

 

She advised borrowers to retain loan agreements, repayment records, screenshots of messages, call logs, details of additional charges and evidence of any alleged disclosure to friends or family members.

 

According to her, complaints involving unfair lending terms, abusive recovery practices and consumer rights could be reported to the FCCPC, while cases involving unlawful processing or disclosure of personal information could be escalated to the NDPC.

 

She, however, added that for financial institutions under the supervision of the CBN, customers should first lodge complaints with the institution before escalating unresolved disputes to the Bank’s Consumer Protection Department.

 

Olatunji also advised borrowers to examine loan terms carefully before accepting credit, particularly the total amount repayable, applicable fees, repayment deadline and consequences of default, as the responsibility for addressing the growing crisis rested on borrowers, lenders and regulators.

 

“The need for credit is real, but financial inclusion should not become a situation where people are pushed into deeper distress. There must be responsible lending, transparent terms, lawful recovery and effective enforcement of consumer protection,” she said.