Easy loans, costly privacy – The Business & Financial Times

 By Yeboah Joseph Yaw

In today’s digital world, access to money is no longer limited to banks or lengthy procedures. With just a few clicks, individuals can download mobile loan applications and receive instant cash.

These platforms promise convenience and speed, making them especially attractive to young people and those in urgent need of financial support. However, behind this ease lies a troubling reality; one that many users fail to recognize until it is too late.

Sika no yɛ mmerɛw, na mmom ne bo yɛ den.

Many of these loan applications require users to grant access to sensitive personal data, including contacts, messages, photos, and location. Without fully understanding the consequences, users often accept these conditions in exchange for quick financial relief. In doing so, they unknowingly surrender control over their private information.

What begins as a simple loan transaction can quickly turn into an invasion of privacy, where personal data is misused, shared, or even weaponized against the borrower.

Reports and experiences have shown that some of these applications go as far as contacting borrowers’ friends and family, issuing threats, or publicly shaming individuals who default on payments.

Such actions raise serious legal and ethical concerns about data protection, consent, and the right to privacy. In a society where technology continues to grow rapidly, the question must be asked: are users truly protected, or are they being exploited?

Data Collection and User Vulnerability

Online loan applications operate by collecting large amounts of personal data from users. In many cases, these apps request access to phone contacts, storage, camera, and even location services. While such access may be presented as necessary for verification purposes, it often goes far beyond what is reasonably required.

The problem is worsened by the fact that many users do not read or fully understand the terms and conditions before accepting them. The urgency of needing money pushes individuals to prioritize immediate financial relief over long-term privacy concerns. As a result, users unknowingly grant broad permissions that allow these applications to monitor and store their personal information.

This creates a situation where users are highly vulnerable. Once their data is collected, they lose control over how it is used.

Obi nnim deɛ ɔde ma, na akyire no, ɔhunu sɛ ne ho akɔtɔ mu.

Misuse of Data and Harassment

One of the most alarming issues associated with online loan applications is the misuse of personal data. Instead of using data solely for legitimate purposes, some companies exploit this information to pressure borrowers into repayment.

There have been instances where loan apps send messages to a borrower’s contacts, falsely labeling them as defaulters or criminals. Others use threats, intimidation, and public embarrassment as tools to recover loans. Such actions go beyond financial transactions and enter the realm of harassment and abuse.

This misuse of data is not only unethical but may also be unlawful. Under Ghana’s Data Protection Act, 2012 (Act 843), personal data must be processed lawfully and for a specific purpose. Using personal information to harass or shame individuals clearly violates these principles.

Ahintasɛm yɛ adeɛ a ɛsɛ sɛ wɔbɔ ho ban, ɛnyɛ adeɛ a wɔde di agorɔ.

Legal Framework and Regulatory Concerns

Data protection and privacy are recognized as fundamental rights in Ghana. The Data Protection Act, 2012 (Act 843) provides a legal framework to ensure that personal data is collected, stored, and used responsibly. It emphasizes consent, transparency, and accountability in the handling of personal information.

In addition, financial service providers are regulated under the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), which requires proper licensing and oversight.

However, despite these legal frameworks, enforcement remains a major challenge. Many online loan applications operate without proper authorization and outside regulatory control.

This concern has been formally recognized by the Bank of Ghana, which has warned the public against engaging with numerous unlicensed online loan applications. In a public notice issued in June 2023, the Bank revealed that over 97 unlicensed loan apps were operating within the country in violation of the law. The Central Bank further noted that the activities of these entities breach customer data and privacy laws, as well as consumer protection standards.

The warning highlights the seriousness of the issue and confirms that the risks associated with these loan applications are real and widespread. Despite such warnings, many individuals continue to fall victim due to lack of awareness and urgent financial needs.

Asɛm no da adi pefee sɛ, ɔhaw kɛseɛ bi na ɛwɔ hɔ ankasa.

The Need for Stronger Protection

To address these challenges, there is a need for stronger regulation and enforcement of data protection laws. Authorities must ensure that companies comply with legal standards and that violations are met with appropriate sanctions.

At the same time, users must be educated about their rights and the risks associated with sharing personal data. Digital literacy is essential in empowering individuals to make informed decisions. People must understand that convenience should not come at the cost of their privacy.

Companies must also adopt ethical practices and respect user data. Transparency, accountability, and fairness should guide their operations.

Sika ho hia, nanso onipa animuonyam ho hia sen saa.

Conclusion

Online loan applications have transformed access to credit, offering quick and convenient financial solutions.

However, this convenience comes with significant risks, particularly in relation to data protection and privacy. The misuse of personal data by some of these platforms highlights the urgent need for stronger legal enforcement and greater public awareness.

Access to financial services should not come at the expense of personal dignity and security. As technology continues to shape modern society, it is essential to ensure that the rights of individuals are protected.

Atɛntrenee ne ahofadi yɛ adeɛ a ɛsɛ sɛ yɛbɔ ho ban.

In the end, borrowing money should not mean losing control over one’s personal information. The law must not only exist; it must work.

Reference

Bank of Ghana (2023). Public Notice on Unlicensed Digital Loan Applications.

The Author  is a World Bank Group Youth Delegate and globally recognized youth leader with over 50 international certifications in leadership, academics, and community service from institutions including the United Nations, German Agency for International Cooperation (GIZ), the University of Finland, and Harvard Aspire Institute. He is a member of the American Bar Association and a current intern at Ntrakwah & Co. Law Firm Ghana, reflecting his active engagement in global leadership and policy spaces.

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