Before we go any further, let us look at what the Law says about selling your loan products. We will be referring again to the Moneylenders Law of Lagos state. Keep in mind however that the Laws for the different states are very similar and follow the same format but be sure to confirm details for whatever state in which you’re setting up your business.
In our posts on getting your lending business up and running, we mentioned that the next step after creating your loan products was to invite borrowers to view and apply for them. In this post, we will be talking a bit about that process, which is really all about “selling” your loan products.
In that post, we also mentioned that using a Lending Platform like Lendsqr makes this process easier because the platform ensures that things run smoothly, from the time you put your products up on offer to when your borrower repays your money. Some platforms allow potential borrowers to view and apply for your loan products while others allow you to be more selective in deciding who sees or has access to them.
Read more: Frequently asked questions on student loans
Section 16 of the Moneylenders Law of Lagos state, states that a moneylender is prohibited from employing canvassers or agents to solicit for borrowers (Eja & Bassey, 2011), neither can the moneylender make the borrower pay a commission to anyone who links the borrower to the lender.
What this means is that you can’t send your “guys” out to harass people on the streets like Agbèrò or all those boys that used to be in Téjúosó market screaming you wan buy jeans in your face and practically stuffing the said jeans down your throat.
There’s only one response to that type of business strategy: STOP IT! Don’t even go there. Not only is it very unprofessional and nothing short of harassment, it is also against the law, so be warned. Also remember that even though you might not require a Moneylenders License to run your business as a side-hustle, you are still bound by the Laws that govern moneylending in the state in which you run your business.
And really, what we’re trying to achieve with these posts is to help you set up a legit, responsible and profitable business. If you’re going to do this at all, you might as well do it right, and with some dignity too. Remember that you have the potential to help people who would otherwise not have access to traditional loan sources with your business. Exploiting them or taking advantage of them should be far from your mind.
Effective strategies for selling your loan products
Now that we’ve talked about how not to live your life and sell your loans, let’s talk about how to do it right.
The power of word of mouth
The first and the most obvious way to sell your products is by word of mouth. You will surely come across people in your circles who will need funds for some venture or the other from time to time, or even for emergencies.
Lending to people that you already know, and trust is a good way to start. It makes the assessment process easier and faster, plus you know where to find them if they don’t pay back on time. This method of selling your loan products is however a double-edged sword. I’m sure that you know (maybe even from bitter experience) that mixing money with family and friends can sometimes go wrong-side-up. Discretion is very key in this case.
Read more: How do lenders manage abandoned loan applications?
Public vs. private lending platforms
How you “sell” depends largely on the platform you choose:
- Invitation-Only Platforms: Other platforms allow you to be more selective. You invite people you know onto the platform. This creates a subconscious air of formality. It removes the “friend-to-friend” familiarity and replaces it with a formal contractual agreement.
- Public Marketplace Platforms: Some platforms throw your products open to the public. They handle the “selling” by linking borrowers to you. While this removes the awkwardness of lending to relatives, you lose a bit of control over the initial relationship.
Leveraging professionalism to reduce defaults
Using a platform to manage these invitations makes the process less personal and more professional. Since every aspect of the transaction passes through the system, borrowers are more inclined to honor the agreement.
Having your cousin make a card payment online is way less awkward than having to ask them for your money at a family wedding while everyone is posing for pictures.
Read more: Why speed matters in credit approvals
Doing it right: building a sustainable and legal lending brand
In the end, selling your loan products is about more than just finding borrowers; it is about establishing a professional ecosystem that balances legal compliance with human empathy.
By moving away from aggressive, manual solicitation and embracing the structured environment of a digital lending platform like Lendsqr, you protect your business from legal pitfalls and your personal relationships from financial strain.
Choosing the right technology allows you to automate the “awkward” parts of the business leaving you free to focus on providing responsible credit that truly helps your community grow.
