Loan Apps in Nigeria: What a ₦50,000 Loan Really Costs You Beyond the Interest

When an urgent bill is staring you down, the first question is usually where the money will come from, not what a loan app may learn about you. 

That was the situation *Bassey faced when the 27-year-old University of Lagos student needed ₦50,000 to ₦60,000. He provided his name, phone number, bank details, Bank Verification Number (BVN), and information about his income and employment to the loan platform. 

Soon after, the money arrived. “At that point, you are not really thinking about data privacy,” Bassey told Techloy in an interview. “You are thinking, ‘I need this money today.’” 

That speed is the appeal of digital lending. But the transaction also moves information in the opposite direction: identity details, financial records and, depending on the app, access to parts of a borrower’s phone. 

What does a loan app actually need from you?

Digital lenders need enough information to confirm an applicant’s identity, assess whether they can repay, prevent fraud, and disburse the loan. 

In a written response to Techloy, the law firm Olumide Babalola LP said this can legitimately include identity and contact details, relevant income and financial information, and verification information such as BVN. 

The harder question, though, is what doesn't belong in that list. 

Jeffrey Nwalima, a technology, media and telecommunications lawyer and Certified Data Protection Officer at Duale, Ovia & Alex-Adedipe, offered a simple test: if a lender asks for access to all the contacts stored on your phone, ask what those contacts have to do with giving you the loan. 

“If you’re asking me this, on what basis?” he said. 

That distinction matters because data collection becomes excessive when a lender collects information it cannot reasonably justify for the credit decision, loan administration, or fraud prevention. 

Google has drawn an even clearer line around some permissions. Google Play, for instance, prohibits apps whose primary purpose is providing or facilitating personal loans from accessing users’ contacts or photos.