LAPO Microfinance Bank is A Devilish Loan Shark

The Nigerian banking system has always been tagged as a system that retards rural development and is harmful to SMEs. Several examples exist to underscore this, ranging from the high interest rates on loans, refusal to give loans without collateral, and absence of moratorium when loans are given out. Big banks are typically guilty of these. But what most people don’t know is that even so-called “SME-friendly” microfinance banks are equally terrible and guilty of the above. In fact, the case of the popular LAPO Microfinance Bank is particularly more annoying and terrible.

Microfinance banks are typically setup as grassroots financial institutions to provide some banking service to people that are effectively covered by conventional banks. I’ll spare you the nitty-gritty of what they do, but just know that they are supposed to be way friendlier than traditional banks to SMEs and people of kow income.

However that’s not the case with LAPO. Instead, LAPO runs a parasitic banking system in rural locations that is equivalent to loan-sharking or usury. But don’t take my word for it, keep reading.

When a person loans money from LAPO, LAPO requires that person to bring a guarantor to ascertain the credit-worthiness of the borrower. This offsets the fact that they don’t request for collateral. And truthfully, it’s not a bad thing. But the next part is, keep reading…

LAPO doesn’t give a grace period (moratorium). LAPO wants its money, with its interest, paid every week beginning from the very next week after they loaned you the money. #LoanSharking! They don’t care when the returns on the business you loaned money for will start coming. Meanwhile, all business, big or small, do not make returns immediately. But LAPO doesn’t care!

Like a loan shark, the very day LAPO expects you to start paying, and you don’t show up after even a few minutes, you get a visit of embarrassment. LAPO staff specialize in embarrassing customers who are yet to pay their debt or are late to pay their debt by even one minute. That’s right! They’ll gather themselves like a swarm of bees and march down to the borrower’s house or shop (because they know their customers extremely well). They’ll cause rancour and commotion, and some of them with the nuts in their brains unscrewed, would even try to fight the customer. That embarrassment would continue for that week until the customer pays.

And to top it off, the interest rates on these loans ain’t cheap or low! It freaking above 30% or thereabout! What the hell! But most people in the rural areas have no choice. Even shop owners in Lagos use their services because the traditional banks won’t loan them a dime. And even if they wanted to, tomatoes, frozen fishes and other perishable items the people sell can’t serve as collateral. So the LAPO loan sharks win!

Most people I spoke with about LAPO often criticise the bank as being devilish, exploitative, etc. One person said “those people dey use juju. The minute you borrow money from them, you no go know wetin you use the money do. Before you know, you don turn debtor”.

So if you know anybody “banking” with LAPO, advise that person to pull out and never return, or else na so so gbese they go dey enter oooo….

2 thoughts on “LAPO Microfinance Bank is A Devilish Loan Shark

Add yours

  1. A devilish loan shark you say?? And d devilish loan shark has been in existence since 1987, that’s 30 years now, and her clients are multiplying by the day without complaint ?? You know, before someone can open his or her mouth to talk about something, someone or some sector, it’s obvious the person’s bad intentions failed and he decides to badmouth. For your information, LAPO mfb gives the clients grace period before they will start paying their loan, LAPO’s interest rate is less than 5% which is addressed as 5%reducing balance, LAPO gives the clients children scholarships even to university level, LAPO even organises skill acquisition classes for the client’s children, LAPO employs the client’s children, LAPO organises a meeting where she appreciates her clients. Which bank will even have such time??? for all I care, LAPO is the best thing that has happened to her clients and they clients are attesting to that. Please dear poster, make your enquiries well, do your assignments well before you could come out to post just yet.

    1. I couldn’t stop laughing when I read your comment. Much of what you wrote is far from reality.
      I am very familiar with LAPO and how it works, so I can tell you these:
      In all the years I’ve seen LAPO in operation, it has never sponsored even the education of its staff, to talk more of customers.
      There has been no skill acquisition training for its client in the locations I’ve seen LAPO operate.
      LAPO employ clients children? C’mon that is a fallacy and you know it.
      Interest rates at LAPO has never been less than 5%. Never! For one thing, it’s a microfinance bank, not a charitable organization. It’s interest are usually in double-digits and you know this.
      Much of what I wrote is based on some research and a lot of observations I’ve noted over the years as both a client and casual observer.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Up ↑

Sunshine and Cyra

Let me share with you the love that I've experienced.

TIME

Current & Breaking News | National & World Updates

thejumbledmind

Some political ramblings...and other jumbledness

%d bloggers like this: