Protect yourself

How to spot loan sharks in Nigeria

Updated 2026 · English

What a loan shark looks like today

Loan sharks are no longer only shadowy people at the market corner. In Nigeria today they often operate as slick-looking mobile apps with colourful branding. That makes it easier to be caught off guard. The danger is the same as always: high hidden costs, harsh collections, harassment, and little respect for your rights. The good news is that the warning signs are predictable, and once you know them, they are easy to see.

Red flags in licensing

The first thing to check is whether the lender is licensed. Loan sharks rarely are. Warning signs include:

• The app or lender does not appear on the CBN’s lists of licensed microfinance banks or approved digital lenders.
• The company hides its ownership, has no registered name, or gives no office address.
• The terms do not name a licensed entity — just an app and a phone number.
• The lender refuses or avoids answering when you ask for proof of licensing.

Our lender directory lists well-known institutions with links to their official sites so you can verify. If a name is not there and you cannot find it on the official CBN list, do not borrow.

Red flags in the offer

A shady offer is usually too good or too vague. Look out for:

• Adverts of “instant money, no questions” with no mention of cost.
• An interest rate that sounds impossibly low, with the real charges hidden elsewhere.
• Refusing to show the total amount you must repay in naira.
• Extra fees that appear only at checkout — processing, “service”, insurance and late fees.
• A very short repayment window with huge penalties for being even a day late.

Red flags in behaviour

How the lender behaves tells you a lot. Licensed lenders follow consumer-protection rules; sharks do not. Warning behaviours include:

• Urging you to sign immediately and not giving you time to read.
• Threatening you, swearing, or insulting you.
• Calling you late at night or repeatedly within minutes.
• Demanding payment in a way that shames or intimidates you.

The common thread across all these behaviours is pressure. A licensed lender has nothing to hide and is happy for you to take your time; a predator depends on you not thinking. Any behaviour that tries to rush, scare, or shame you out of careful judgement is a signal to walk away. Trust the discomfort — it is usually your instincts catching something your eyes have not yet.

Red flags with your phone and contacts

Many predatory loan apps ask to read your entire contact list before they approve anything. They use it to pressure you: if you do not pay, they call your family, friends, and employer and publicly shame you. This is a major invasion of your privacy and rights. Ask yourself: why would a legitimate lender need to know everyone you know just to check that you can repay a small loan?

What to do if you are caught

If you have already borrowed from a loan shark, the worst move is to panic and take out more loans to repay it. That is how a small problem becomes a debt trap.

1. Stop sharing any more personal information or granting more permissions.
2. Document everything — save messages, notes and call logs.
3. Talk to someone early — a trusted friend, family member, or adviser.
4. Complain to the regulator — see your rights as a borrower for how to report a lender to the CBN.
5. Never hide — if you owe a licensed lender and are struggling, contact them and work out a plan rather than disappearing. See what happens if you default.

Feeling embarrassed is understandable, but it is also a trap: shame keeps you silent, and silence gives a predator the advantage. The people who recover from a loan shark are the ones who speak up early and get help. You are not the first person to fall for one, you will not be the last, and there are real remedies — complaints, rights, and restructuring paths — waiting for you the moment you stop facing it alone.