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‘My Friend the Shylock’: Money-Lenders and their Clients in South-Western Nigeria

Published online by Cambridge University Press:  22 January 2009

Toyin Falola
Toyin Falola
Affiliation:
The University of Texas at Austin*
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Extract

As older ways of raising credit declined or were re-defined, the acquiring of loans from a specialized group of money-lenders flourished in colonial Western Nigeria. Money-lenders charged exorbitant interest and insisted on loan repayment at a fixed date. Borrowing from the modern banking system, the money-lenders prepared legal documents and required surety. Debt recovery was generally painful to defaulters; they were humiliated, harassed, and had their property confiscated. The practice generated many conflicts. The debtor was generally unhappy, especially if the money was used for consumption. Lenders cheated with high interest rates and other charges and promoted for their own ends indiscriminate lending to poor and vulnerable people. To minimize conflicts and protect debtors, the colonial administration decided to regulate the trade with ordinances, especially the Moneylenders' Ordinance of 1938 which set limits to interest and forced lenders to obtain licences. In general, lenders subverted the ordinance, creditors and debtors became more cunning as documents were falsified to protect lenders, and those who needed money continued to accept harsh terms.

Type
Economy, Society and Material Culture in Nigeria
Information
The Journal of African History , Volume 34 , Issue 3 , November 1993 , pp. 403 - 423
Copyright
Copyright © Cambridge University Press 1993

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References

1 National Archives, Ibadan [hereafter N.A.I.], Ije Prof 4/956 Vol. I, Money Lenders' Ordinance, Cap. 147, Corresp. in re 1929/44, Petition of Mrs Gbolade Dele to the District Officer, 29 June 1941.

2 Ibid.

3 N.A.I., Oyo Prof 1/1477 Vol. II, Money Lenders' Amendment Ordinance, 1935, Petition by A. Sanni.

4 The impact of African culture on alien institutions such as banking and insurance is yet to be fully investigated. These new institutions were forced to adapt to the local milieu and to take into consideration indigenous values relating to death, debts and the role of the extended family.

5 This process of adaptation is one of the issues pursued in this paper, although space does not permit its full elaboration.

6 The iwofa system has been discussed extensively elsewhere. See my paper on ‘Pawnship in colonial southwestern Nigeria’, in Lovejoy, Paul and Falola, Toyin (eds.), Pawnship in Africa (Boulder, Colorado, forthcoming).Google Scholar

7 Johnson, Samuel, The History of the Yorubas (Lagos, 1921), 119.Google Scholar

8 Ale, A., The Underdevelopment of Indigenous Entrepreneur ship in Nigeria (Ibadan, 1975).Google Scholar

9 The osomalo requires a separate study. People bought on credit from the osomalo, promising to pay by instalments. Whenever there was a default, the osomalo would resort to tough and crude means to recover the money. As most of the goods involved were perishable items such as cloths, the osomalo could not recover the goods but could only insist on full payment.

10 Johnson, , History, 131.Google Scholar

11 Fadipe, N. A., The Sociology of the Yoruba, ed. by F. O., and Okediji, O. O. (Ibadan, 1970), 164–5.Google Scholar

12 Interviews with M. Adeyemi (age 75 +), June 1990; P. Alabi (80 +), June 1990.

13 Pawnbroking (to be distinguished from pawnship) was another trade which developed during the colonial period. This trade is yet to be investigated.

14 N.A.I., West African Lands Committee, Papers and Correspondence (London, Colonial Office, 1916)Google Scholar, Questions 7,538–63.

15 N.A.I., C.S.O. 30315 Vol. II.

16 N.A.I., C.S.O. 30315 Vol. I, Money Lenders' Amendment Ordinance 1935, District Agent of John Holt to the Chief Secretary to the Government, 4 Mar. 1936.

17 Ibid.

18 N.A.I., C.S.O. 26/30315 Vol. I.

19 N.A.I., Okiti Div. 1/1/O.K. 1238, Money Lenders' Ordinance Cap. 136, Application letter of M. Emmanuel to the District Officer, 28 Aug. 1953.

20 N.A.I., C.S.O. 26/30315 Vol. II; Oral interviews: M. Ajitoni (age 70 +), money-lender at Ibadan in the 1950s; A. Adeoti (80 +), money-lender in Lagos in the 1940s.

21 N.A.I., C.S.O. 26/30315 Vol. III.

22 N.A.I., Ije Prof 4/7.679 Money Lenders' Ordinance, Cap. 147, Corresp. in re.

23 Ibid., John Holt to the Lagos Town Council, 4 Mar. 1936.

24 N.A.I., Com. Col. 1/553, Indebtedness of Mrs Hilda Hamilton to Lagos Money Lender.

25 N.A.I., Agbo Dist. 1/AG 530, Money Lenders' Ordinance.

26 West Africa, 20 Aug. 1938, p. 1122.

27 N.A.I., C.S.O. 26/30315 Vol. I, Police Magistrate to Chief Registrar of Supreme Court, 26 Aug. 1935.

28 N.A.I., C.S.O. 26/30315 Vol. I, Acting Police Magistrate to the Chief Registrar, Supreme Court, Lagos, 30 Nov. 1936.

29 N.A.I., C.S.O. 26/30315 Vol. I, John Holt to the Lagos Town Council.

30 See for instance N.A.I., Ije Prof 4/J.679 Money Lenders' Ordinance Cap. 147 Corresp. in re. 1929/44 and Ijaw W. 4/W.1 167 Vol. 1 Money Lenders' Licence-Matters Re 1937/48; and Kuku Div. 2 KD 928, Money Lenders Re.

31 The ordinance for Trinidad borrowed extensively from the English MoneyLenders' Act of 1927.

32 For the Trinidad Ordinance see N.A.I., C.S.O. 26/30315 Vol. II, Money Lenders' Amendment Ordinance 1935. The five modifications were that: money-lending and pawnbroking transactions carried out by the same person should be differentiated; ‘signatures’ by marks made by illiterate parties to money-lending contracts should be authenticated by suitable officials; maximum rates of interest should vary from 10 to 45 per cent according to the security and the period of the loan; interest on amounts awarded to money-lenders by judgement of courts should be at the same rates as those on the original loan.

33 N.A.I., C.S.O. 26/30315 Vol. II, Memo, by the Governor General.

34 Borrowers were exempted from paying as part of interest the expenses on stamp duties, registration of documents, preparation of documents by legal practitioners and other costs which should be incurred by the lender.

35 Interest was calculated in percentage rates in the body of the ordinance but an appendix to it provided guidelines for other methods not based on percentages.

36 However, if a lender defaulted the money-lender could charge a simple interest from the date of default until the sum was paid.

37 N.A.I., C.S.O. 26/30315 Vol. III, Money Lenders' Amendment Ordinances, 1935, Williams to The Acting Chief Secretary to the Government, 26 Aug. 1938.

38 N.A.I., C.S.O. 26/30315 Vol. II.

39 N.A.I., C.S.O. 26/30315 Vol. I.

40 N.A.I., C.S.O. 26/30315 Vol. II, Clerk, Executive Council, to the Ex. Co.

41 N.A.I., C.S.O. 26/30315 Vol. I.

42 N.A.I., C.S.O. 26/30315 Vol. III, Nigerian Moneylenders' Association to the Governor of Nigeria.

43 N.A.I., C.S.O. 26/30315 Vol. III.

44 Ibid.

45 N.A.I., Ben Prof 1/BP 1423, Money Lenders' Ordinance.

46 N.A.I., Oyo Prof 1/1477 Vol. I, Money Lenders' Ordinance, Corresp. Re.; and Vol. II, Money Lenders' Ordinance, Corresp. Re.

47 N.A.I., Iba Div. 1/1331, Vol. IV, Money Lenders' Licences.

48 N.A.I., Agbor Dist. 1/Ag 530, Police report of 26 June 1952.

49 N.A.I., Iba Div. 1/1331 Vol. IV.

50 Ibid.

51 N.A.I., Ije Prof 4/956 Vol. I.

52 This contained information on the name of money-lender, name of borrower, amount of loan, security, if any, purpose for which loan was required, length of period for which loan was required, amount of interest charged, names and addresses of witnesses, and the date of transaction.

53 This contained information on names and address, the class of business and the date the licence was approved.

54 Ibid.

55 N.A.I., Ije Prof 4/956 Vol. I, letter of 10 July 1942.

56 N.A.I., Ak Div. Co. 9/450, Money Lenders, 1961.

57 N.A.I., Ije Prof 4/956 Vol. I.

58 See for example the case of Afolabi Fadugba who struggled to recover a loan of £80, in N.A.I., Ak Div Co. 1/166.

59 N.A.I., Ak Div. Co. 9/450.

60 See for example N.A.I., Ondo Prof 1/1/570, Money Lenders' Ordinance, Corresp. Re.

61 N.A.I., C.S.O. 26/30315 Vol. II.

62 Ibid.

63 Ibid.; Oral interviews with informants previously cited.