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Rise in personal loans: Symptom of hard times for us

A personal loan, in general, is the money we secure from banks and other private money lenders, without having to provide any collateral. It is a…

A personal loan, in general, is the money we secure from banks and other private money lenders, without having to provide any collateral. It is a less risky form of loan for the borrower, in the sense that, they do not have to fret over losing any of their physical assets. 

It is equally useful to note that such a loan tends to be of a lower interest. Most times, people use the loan as a quick response to an emergency or to satisfy a previous loan. There are those who spend theirs on social activities such as weddings, birthdays, funerals, vacations, honeymoons, among others. The best advantage of a personal loan is the borrower’s privilege to dispense it as they see fit.

In the older days, only few Nigerians applied for such loans. This is because there were lesser social pressures and economic frustrations. Securing an apartment in Lagos, for example, you will be bothered with strange and questionable charges. In fact, there are those who feel you could only be considered for a tenancy if you could pay two to three years’ house rent in advance. This, indeed, is to the exclusion of the “extortionist” agent fee among others. Life, in consequence, becomes tougher than bearable, pushing a large number of Nigerians towards a quick solution.

Traders, as usual, are being suffocated with multiple levies, resulting in their inadequacy to meet up with financial obligations, compelling them to resort to personal loans.

With COVID-19 hitting us very hard, the proliferation of these loans cannot be further denied. Parents, in their droves, secure a personal loan to pay off their children’s school fees and rejig their businesses.

While salaries are explanatorily cut down, the demand for personal loans becomes necessary to help families cushion the effects of this ravaging time. As the prices of essentials continue to grow exponentially, more and more people are joining the “give me loan” queue. Furthermore, In the face of a stagnant salary, but a perplexing price hike, life is gradually losing its meaning for some Nigerians.  There is a growing rise in the number of loan apps. Today, a click on your phone could get your account deposited with a cash from an online money lender. Stories of loan defaulters are now ubiquitous. This again, is most traceable to the “boiling” time we are now facing as a nation. Shaming loan defaulters, as some people would want to have it, in my view, is not apt. This is because, Nigerians are going through a harder time. This, in no wise, justifies the defaulters. 

However, it is “scorching “season in our economic experience. In fact, “never as hard as this for two decades now”. While this is not an address to sympathize, of course, it does solidarize. Face it strong, say no to suicide, come what may. Recall, we are Nigerians, persistent and enduring people.

Samuel Ogunnaike wrote from Lagos.