Last August, Baba Bolu asked his bank for a ₦500,000 loan, but after a series of checks, his collateral was deemed insufficient. Unhappy with the decision and still in need of the money, he offered his bank more collateral. The bank accepted, and that was the problem.

This is his story, as told to Tezor Dedam.

I run an electronics repair shop in Yaba, and I needed money to grow it.

I wanted to refurbish my shop, buy more equipment and hire an apprentice to help me work faster. I also needed to pay rent for the shop because I was owing at the time. I asked my friends and I asked my family for money, but nobody seemed to have it. 

Some people advised me to borrow from the bank, so I went and asked them for the loan.

₦500,000 was more than enough for what I wanted to do; in fact, there was going to be money left over. I planned to use the rest of it for household expenses, school fees and any other thing that came up.

I’m not certain who first suggested more collateral, but I think it was both of us. They told me they didn’t think I could pay back, not with the collateral I was offering. So I offered more collateral. After some consideration, they agreed.

The initial collateral was just some of my equipment. Later, I added all of the other equipment in my shop and a small fridge and a standing fan from my home. The people from the bank came to my shop with an electrician. They took plenty of pictures. 

They also took my address and the address of my guarantors.

Looking back, I really regret taking that loan. It was not worth it and I don’t like the arrangement at all. But I agreed to it, so I must pay back the money. I don’t want them to come and take things from my shop and from my house. 

I paid ₦50,000 in September. I did the same in October, November, December and January. I will pay again later this month.

The worst part is that I haven’t used the loan to grow my business in any meaningful way. 

In fact, I’ve been so scared of not being able to pay back and losing everything I put up as collateral that I have been using some of the ₦500,000 to pay the bank what I am owing. 

I know this might not be wise, but I must pay back the loan.