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My Money Mistake: I Took A Loan To Start A Business, And I Lost It All

My Money Mistake is a weekly PiggyVest series that explores the worst money mistakes real Nigerians have made, and the lessons they learnt from it.

For this week’s episode of My Money Mistake, we spoke to a product designer in his 20s who took a loan to start a business. He tells us about how it happened and the lessons he learnt from the experience. 

Could you tell me about your money mistake?

During the Covid pandemic, I had this idea of learning a tech skill and starting a business around it. On doing some research, I stumbled on affiliate marketing and told a few of my friends about it. 

One of them seemed really interested because she was also an affiliate marketer. She told me that if I was serious about it, she’d loan me some money to get started. Thinking this was a good opportunity, I agreed. 

So, what happened?

She sent me some agreements, involved a lawyer to make it official, and eventually loaned me the money. Then I got into affiliate marketing — I followed all the advice, set up my ads account, did everything I was supposed to do, and I was expecting to make returns. But it never happened. 

Wow. That’s rough.

Yeah. After about six months, I hadn’t made a single sale from it and had lost everything. So, I eventually gave up. 

And the loan?

I didn’t have enough money to refund her, so I kept asking her to give me more time. Then things took a surprising turn when police officers showed up at my door one day to arrest me. She’d threatened me for a while before they eventually came.

It was two days before my final exams, so I was really disoriented. I called my mum and just started crying, but she couldn’t do much. They harassed me and treated me badly. It affected me a bit, but I’m okay now. 

I’m so sorry about that. How much was the loan?

She loaned me ₦‎70k, but she told the police she’d loaned me ₦250k. I had to negotiate it down to ₦120k. 

How did you make it out of the police station?

I still didn’t have a way to refund the money, even with the negotiation. One of my friends came through and paid her ₦50k, and we agreed to pay off the rest in instalments within three months. 

My mom gave me some part of it, and I eventually got a job in tech that allowed me to finish up the payment in three months. 

What lesson did you learn from this experience? 

I learnt to not start a business without doing proper research and with money that’s not mine. I can manage the risk of losing my money to a business that didn’t work well, but I can’t do that when it’s a loan.

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