By Okechukwu Nwanguma
The House of Representatives’ recent decision to investigate the “arbitrary, excessive, and unexplained” deductions from customers’ accounts by deposit money banks is both necessary and overdue.
For too long, Nigerians have endured exploitative bank charges that defy logic, regulation, and fairness.
Moved by Hon. Tolani Shagaya, the motion titled “Need to Curb Arbitrary Bank Charges and Protect Nigerian Customers” decried the constant, unjustified deductions that have become the norm across Nigeria’s banking sector. Despite repeated warnings by the Central Bank of Nigeria (CBN), commercial banks continue to impose multiple, opaque, and often illegal charges – from SMS alert fees and card maintenance costs to inexplicable transfer and account maintenance deductions.
This is not the first time the National Assembly has raised an alarm. In 2016 and again in 2023, lawmakers decried what they described as “unauthorised deductions” and “illegal fees” imposed on customers in breach of financial laws. Yet, nothing has changed.
Hon. Shagaya rightly warned that if these practices persist, public trust in banks will erode, savings will decline, and financial inclusion – the backbone of Nigeria’s cashless economy – will suffer. The House has now directed the CBN to publish a clear list of approved charges, enforce compliance, and set up a redress mechanism for aggrieved customers.
But Nigerians have heard such promises before. What they need now is not another round of investigations or press statements – but decisive, sustained action.
Unfortunately, the exploitation of ordinary Nigerians is not limited to the conventional banking system. Beyond the glossy halls of commercial banks lies a darker, more dangerous frontier of financial abuse – the predatory world of digital loan apps and rogue microfinance institutions.
From Financial Inclusion to Digital Terror
Across Nigeria today, thousands of families are trapped in what can only be described as digital loan slavery. What started as a financial inclusion initiative has degenerated into a national nightmare of harassment, extortion, and psychological torture.
Licensed and unlicensed microfinance banks, alongside hundreds of online loan apps, operate with brazen impunity – flouting every known regulation of the CBN, the Money Lenders Act, and the Nigeria Data Protection Act.
Borrowers who take small emergency loans are often charged outrageous interest rates – sometimes as high as 60% in seven days – and subjected to illegal compound interest that can multiply a ₦50,000 loan into ₦300,000 within weeks. When repayment becomes difficult, the real ordeal begins.
Agents of these digital lenders bombard borrowers with hundreds of threatening calls daily. They send defamatory messages to family members, employers, and entire contact lists – branding borrowers “fraudsters,” “ritualists,” or “HIV patients.” Some victims have suffered heart attacks or depression; others, tragically, have taken their own lives.
This is not mere financial misconduct – it is digital violence and a grave human rights violation.
The Regulatory Silence
What makes this tragedy even worse is the deafening silence – and inaction – of regulators.
The CBN’s Consumer Protection Framework and Fair Lending Policy prohibit such predatory practices. Yet, even some licensed institutions, including well-known microfinance banks, have been accused of charging between 60% and 400% annual interest rates.
Unlicensed operators, often without traceable addresses, continue to terrorize Nigerians under the weak watch of regulatory agencies. The CBN, the Federal Competition and Consumer Protection Commission (FCCPC), and the Nigeria Communications Commission (NCC) have announced measures at various times, but enforcement remains inconsistent, reactive, and ineffective.
In this vacuum, loan sharks have built a multi-billion-naira industry on fear, shame, and despair.
A Matter of Law, Health, and Humanity
This crisis transcends economics – it is a question of law, health, and human dignity.
The activities of these predatory lenders violate not just financial regulations but also fundamental human rights – including the right to privacy, reputation, and freedom from inhuman and degrading treatment. The mental health toll is immense, and the rising number of suicides linked to loan harassment makes this a public health emergency.
It is unconscionable that in 2025, Nigerians still risk their lives to borrow ₦10,000 from a so-called financial inclusion platform.
What Must Be Done
Nigeria must urgently align with global standards of responsible lending. The World Bank’s Principles for Responsible Digital Credit (2021), the G20 Principles on Financial Consumer Protection (2022), and India’s Digital Lending Guidelines (2022) all emphasize affordability checks, transparent pricing, and ethical debt collection.
Countries like Kenya and India have already banned abusive loan apps and prosecuted their operators. Nigeria must follow suit.
The CBN should:
1. Conduct a nationwide audit of all microfinance banks and loan apps – licensed or otherwise.
2. Revoke the licenses of operators engaged in predatory or illegal lending.
3. Enforce interest rate caps and prosecute offenders.
4. Establish a robust, accessible redress mechanism for consumers.
5. Collaborate with FCCPC, NCC, and security agencies to trace and shut down unregistered digital lenders.
6. Enforce the Nigeria Data Protection Act to stop criminal misuse of personal information.
A Call to Conscience
What Nigeria is witnessing is a satanic enterprise – a financial ecosystem that preys on the poor under the guise of empowering them. Families have been destroyed, reputations ruined, and lives lost.
The Central Bank and the National Assembly must not only probe and sanction commercial banks but must also dismantle this wider web of financial exploitation. Consumer protection is not a luxury – it is a moral and legal obligation.
No nation can build a stable economy on the broken backs of its citizens.
It is time to make Nigeria’s financial system serve the people – not enslave them.
Okechukwu Nwanguma
Executive Director, Rule of Law and Accountability Advocacy Centre (RULAAC)
