She borrowed N1.2m and it is now N9.6m debt

@seyideassistant_sda

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SoundTikTok sound · original sound - seyideassistant_sda

Promoted product

OPay

Why it worked

The video addresses a prevalent and relatable financial struggle, using a specific, alarming example to capture attention and then breaking down the problem into understandable tactics. The speaker's personal experience and the clear, actionable advice likely resonate with viewers facing similar issues.

Summary

The video discusses the predatory practices of some digital lending apps, highlighting how a small loan can balloon into a massive debt due to hidden daily interest rates and fees. The speaker explains three common tactics used by these lenders: creating an illusion of low cost, bypassing regulatory interest rate standards, and using weaponized contracts.

Structure

1Introduction of a user's debt problem
2Explanation of the speaker's expertise on loan apps
3Discussion of the first tactic: illusion of low cost
4Explanation of the second tactic: bypassing CBN standards
5Explanation of the third tactic: weaponized contracts
6Concluding advice to avoid consumption debt

Product placement

OPay: ACTS - mentioned as the source of a loan. Removing it would change the story. x.com: APPEARS - a social media platform where a post was shared. Removing it would not change what happens in the video.

Original caption

This is why you need to stay away from loan sharks. Talk to anyone who’s been trapped in that cycle, and you’ll hear the same thing: it rarely ends well. What starts as a quick solution can quickly become a financial nightmare. I’ve seen people borrow just ₦50,000 for 14 days. 2 years later, they’ve paid back over ₦2 million, and they’re still being told they owe another ₦2 million. That’s the reality of predatory lending. It’s designed to keep you paying, not to help you recover. If you’re struggling financially, please think twice before taking that route. A short-term fix can become a long-term burden that’s incredibly difficult to escape.

More from @seyideassistant_sda

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Transcript

Someone sent me this message that posted on X. The person said she borrowed 1.2M from OPay, not OP, it's just one of those digital lenders. And over the course of two or three years, the exact time the loan had increased to 9.6 million and she's confused. How can this? When I started getting serious with content creation in 2020, one of the topics that was heavy on my heart was borrowing and loan apps, loan sharks. I even wrote a book on how to deal with loan sharks and crippling debt. Subject of debt, don't address enough. It's also deeply spiritual, especially consumption debt. The moment you borrow money from someone, the relationship dynamics changes. The person becomes like your boss and you become the servant until you pay that debt back. To this, there are three things I'm gonna share about their operation. First one is, they create the illusion of low cost. They will tell you that the loan is 1% or 0.3%. You're going to pay about 1% of 50k is just 500 Naira. What they don't tell you is it is 1% every day for the entire duration of that loan. The second thing they try to do is to bypass the CBN standard. CBN sets what is called MPR. The current MPR in Nigeria is around 26.5 to 27.5%. Let's say maximum 30%. A lot of lenders, microfinance and commercial banks would use that as the ceiling, the maximum interest they charge on loans. It's not that it's enforceable. It's just a guideline. Choose to take more than that from people as far as there is willingness to pay on your borrower. So that's it. Loans. That 30% is the benchmark. What they do is they don't call it interest. That the interest on this loan is 30%, but there is service charge of 30% and administrative charge of 30% plus processing fees of 30%. Third thing you about their operation is weaponized contract. Interacted with over 1,000 victims of loan apps in the last six years. And I can tell you categorically that none of them has a good story to tell. It's always end in regret. If you can, do your best to stay away from consumption debt.