The National Identification and Registration Authority (NIRA) has warned against the misuse of National Identification Cards (IDs) as collateral for loans. The authority said that IDs are government-issued documents and should not be used as security when seeking loans.
In a letter dated September 11, 2023, NIRA said that ID cardholders should immediately cease the practice of using their cards as collateral for obtaining loans. The authority also warned money lenders who have been accepting IDs as security for loans to stop doing so.
The misuse of IDs as collateral is a serious concern because it can lead to identity theft and other fraudulent activities. NIRA said that it is committed to protecting the integrity of IDs and ensuring that they are used for their intended purpose, which is to confirm an individual’s identity and citizenship.
The authority urged the public to be vigilant and report any individual or institution that retains IDs as security or collateral to the nearest NIRA office.
NIRA’s warning comes at a time when there has been an increase in the number of people using their IDs as collateral for loans.
This is due to the high cost of living and the difficulty of accessing traditional forms of credit. However, NIRA said that there are other ways to obtain loans without having to use your ID as collateral.
If you are considering taking out a loan, NIRA advises you to speak to a financial advisor to explore your options. You should also be aware of the risks involved in using your ID as collateral.