You have probably seen the apps, websites, and even social media pages of some of these fast-growing online loan sharks. They are quick, accessible, and convenient if you are looking to overcome an unforeseen financial hiccup.
While they have their advantages in this gradually deteriorating economy, quick online loans, like many other simple and acquirable things, come at a cost. Putting the expected interest and delayed payment charges aside, there’s more to these quick loans than meets the eye and Ugandans need to know some of these things before they go all in.
These online loan sharks offer cheap and instant loans to anyone so long as you have a smartphone and Internet access. An effective strategy that has had many people running to them is the exclusion of collateral security and the ease with which these loans can be acquired compared to your everyday banking institution. All they require is for the applicant to own a national id and two guarantors. Easy? Definitely.
So, the million-dollar question is, how do these loan sharks expect to get their money back if the deal is done online, with no collateral and the big possibility of presenting fake guarantors?
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How do these Loan Sharks Get Their Money Back?
What loan applicants do not realize is that once they are approved to acquire these loans, they have compromised their privacy by sharing otherwise private or personal data. It is no secret that few people ever bother to read the terms and conditions or privacy statements of different apps before they check the I agree box. If you take time to read these terms and conditions you will realize the applications ask to access your phone contacts, call logs, location, and more.
Taking Mangucash for example, once applicants finalize their application, the app will request access to their call logs and location. The requested amount of money will then be transferred to the applicant’s mobile money number and it is expected back in 7 days (depending on the amount) with an interest of approximately 30%.
Once the applicant defaults after the allocated seven days, the guarantors are contacted to prompt payment. If this does not work, the applicant’s contacts are sent messages and called with the intention of getting them to coerce the defaulter to pay or ask them to pay on their behalf. That is extremely embarrassing if you ask me.
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In conclusion
Unless it is an emergency, opting for these quick loan sharks online might prove disastrous. The question should be why an application that lends money will require access to your call logs and messages. According to Data Protection and Privacy Act 2019, any person collecting data must inform the data subject about the nature and category of data being collected, the name and address of the person responsible for the collection of data, and the purpose for which the data is required and whether or not the supply of data by the supply by the data subject is discretionary or mandatory