Unscrupulous behavior by digital lenders may result in severe penalties of up to ₦100 million under the latest regulations enforced by the Federal Competition and Consumer Protection Commission (FCCPC)
In a significant move to professionalize Nigeria's digital lending market, the Federal Competition and Consumer Protection Commission (FCCPC) has introduced new regulations for digital lenders. These regulations, known as the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025, aim to curb unethical practices, protect consumers from predatory lending, and promote financial inclusion.
The new rules impose strict penalties on digital lenders who violate the regulations. Individuals found guilty of breaches could face fines of up to ₦50 million, while companies could be fined up to ₦100 million or 1% of their annual turnover. Directors of offending firms may also face bans of up to five years from the industry.
To operate legally, digital lenders must comply with various requirements. They are required to obtain borrower consent before lending, disclose all fees and interest rates transparently, and approve loans only for borrowers capable of repayment. Compliance with the Nigerian Data Protection Act, 2023, is also mandatory for handling personal data.
Lenders, including telecoms offering airtime/data loans, are now required to report loan repayment data to credit bureaus within 48 hours upon request. This integration aims to boost financial inclusion and help build borrowers’ credit histories and scores.
The regulations also introduce registration and renewal fees for digital lenders. A license application fee of ₦100,000 is required, along with an approval fee (covering up to two loan applications per lender) of up to ₦1 million. Licenses expire every 36 months and must be renewed with an annual levy of ₦500,000.
Entities already operating in the sector have 90 days to comply with the new regulations. Existing operators, such as MTN, which contributed ₦83.19 billion to its ₦2.1 billion consumer lending market in H1 2025 through airtime lending, will now come under the FCCPC's purview.
The FCCPC will also monitor and regulate interest rates to prevent exploitative charging. Gbemi Adelekan, president of the Money Lenders Association (MLA), has commended the new regulation, noting its potential to establish stability within the sector and protect consumers.
Under the new rules, digital lenders must limit advertising and cease unsolicited marketing. Lenders must also undergo audits, submit biannual reports, file annual returns, and produce records within 48 hours of request.
These regulations mark a significant regulatory evolution designed to professionalize Nigeria’s digital lending market, protect consumers from predatory practices, and promote financial inclusion by linking digital lending activities with formal credit reporting systems.
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