Nigeria’s digital lending industry now faces tougher compliance requirements, with fines of up to ₦100 million or 1% of a company’s annual turnover for unethical conduct, under new regulations issued by the Federal Competition and Consumer Protection Commission (FCCPC).
The Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025, released in July, aim to strengthen oversight of the country’s $2.1 billion consumer lending market. The rules build on the FCCPC’s 2022 framework, which targeted illegal practices such as debt shaming, and align with similar reforms underway in other African markets, including Kenya.
For the first time, standard penalties have been set: individuals may be fined up to ₦50 million, while companies face ₦100 million or 1% of the previous year’s turnover. Directors of offending firms risk sanctions lasting up to five years. Penalties can also include suspension, delisting, or revocation of approval.
The regulation applies to all lending businesses, both physical and digital, that operate across state lines — including airtime lending services like MTN’s MoMo and Airtel’s SmartCash. Only microfinance banks are exempt, and they must apply for waivers.
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Key provisions include:
- Licensing and Fees: New applicants pay ₦100,000 to apply and ₦1 million for approval (covering up to two apps). Existing licensed lenders — 461 as of early August — must also pay ₦1 million for renewal, with additional apps costing ₦500,000 each and a cap of five apps per owner.
- Approval Period: Licences expire after three years and must be renewed by March 31 of the following year. Renewals are required every 36 months, with an annual levy of ₦500,000.
- Consumer Protection: Lenders must avoid unsolicited marketing, disclose all fees upfront, approve loans only for borrowers able to repay, and keep interest rates within fair and non-exploitative limits.
- Data Compliance: Operators must follow the Nigerian Data Protection Act 2023, undergo audits, file biannual and annual reports, and submit requested records within 48 hours. Existing lenders have 90 days to comply.
Industry figures say the rules could improve market stability but also raise operating costs. The Money Lenders Association noted that some provisions might affect pricing and service accessibility, while fintech leaders such as Lendsqr’s Adedeji Olowe see the move as confirmation that digital lending is now a core part of Nigeria’s financial system.
