Why Nigerians don’t pay their loans

That Nigerians don’t pay back their loans on time isn’t up for debate, after all, we all get replete with stories of the high and mighty, and the not so mighty, dragging it out with banks regarding bad loans.

“The Nigerian attitude to debt is curious and nowhere could this have been better demonstrated than in the Federal government’s failure to recover thousands of loans disbursed to farmers under the Anchor Borrowers Scheme.”Tech Cabal,

That the attitude of Nigerians to debt repayment has been a significant barrier to consumer credit in Nigeria would be an understatement. For the longest time, consumer loans were a tough nut to crack, and access to personal loans in Nigeria could be likened to a search for water in the hot sunny desert. In 2019, everything changed or so we thought.

In 2019, the Central Bank of Nigeria marshaled banks, like a bunch of errant kids, to give more loans, especially for the most underrepresented groups. Prior to this time, the average Nigerians had little or no chances of accessing consumer credit, and even when they did, chances were that such persons had walked to Hades and back.

Many thought the CBN directive was going to increase access to personal loans, which on the face of it, it did. But did it get to the everyday man like you and me? You bet!

The fear of defaults is the beginning of wisdom

Even then, why don’t Nigerians pay back their loans? Let’s dive in to find out:

Ignorance on the gravity of not paying loans

Ignorance is bliss because how else does one explain the fact that not many Nigerians do not know that defaulting on loans is actually actionable in court? You can be charged to court for the loans you owe, and eventually end up paying even much more than you bargained for.

Needless to say that defaulting on your loan payments can result in you also getting blacklisted by other lending companies.


An increasing cost of living

The truth is that when the cost of living is impacted, repayment of loans is definitely going to take a hit!

Our badly torn social fabric

You cannot expect people who have not fulfilled their basic needs like food, shelter to hold things like accountability in high esteem. More so when they have seen our leaders who should serve as a moral example for everyone, get away with owing institutions.


It doesn’t also help that the consequences for defaulting on loans are not widely known. Neither do they care to know that money lent to them are actually other people’s monies.

Financial illiteracy

The average person lacks this knowledge that may seem basic. However, if the borrower who earns N100,000 per month (which is the average monthly salary of a Nigerian between 25–29) accounted for inflation, and price hikes here in food, fuel, etc, before taking these loans surely, when these “acts of God Nigeria” happened the effect would have been cushioned and would not affect their loan repayment schedule or plan. Alas, such is not the case!

A compelling reason to pay your loan?

Before this time, anyone could owe one bank and go to open an account in another without any fear of being found out. Not only would this directive help lenders retrieve their monies easily, but it would also force borrowers to pay up because they know there is no hiding place.

In fact, the only way you can escape paying your loans in 2021 is if you live under a rock.

Finally, please pay your loans because it is the right thing to do. Surely this should need no explanations!

Lendsqr is a platform that takes the pain out of lending. Our initial focus is on small and individual lenders.