With the increased abuse of the right to privacy of consumers as well as illegal means applied by some digital money lenders in harassing their debtors, the Federal Competition and Consumer Protection Commission (FCCPC) in its attempt at regulating the digital lending space, has in its framework made the registration of digital lending businesses/companies, a mandatory requirement for carrying out a digital lending business in Nigeria.
WHAT TYPES OF BUSINESSES ARE REQUIRED TO BE REGISTERED UNDER THE FCCPC FRAMEWORK?
The directive applies to companies offering digital lending services as well as consumer finance businesses.
WHY IS REGISTRATION WITH THE FCCPC IMPORTANT FOR MY DIGITAL LENDING COMPANY?
Registration with the FCCPC shows that your business is compliant with the FCCPC framework and will protect your business from penalties and or liabilities that may be incurred as a result of failure to comply.
Also, if your digital lending company relies on other payment service providers such as Paystack, Flutterwave, etc. to operate, there is a high chance that your company will be required by such payment service providers to provide proof of full or conditional approval from the FCCPC as part of their KYC requirement before your business will be permitted to integrate their APIs into your digital lending platform.
HOW TO GET AN APPROVAL FROM THE FCCPC AS A DIGITAL MONEY LENDER IN NIGERIA
As provided by the framework, to register and obtain approval from the FCCPC, applicants must follow these steps;
Step 1; Get and complete the FCCPC INTERIM DIGITAL LENDING GUIDELINES FORM 001 (FORM DLG 001). The form provides questions regarding preliminary information as it concerns the business such as; Name of the business, address, website, phone number, etc.
Step 2; Alongside FORM DLG 001 mentioned above, submit the following documents;
a. Certified copy of the certificate of incorporation of the applicant
b. Brief description of the business and where relevant, their groups
c. An organogram showing role players and their location, and any operational approving authorities or person
d. Name and address of a person within the business who is authorized to accept all correspondence and accept service on behalf of the business
e. Evidence of membership in any trade or professional associations
f. Any service level agreements with any service providers with respect to operations but excluding administration
g. Evidence of a feedback and complaint resolution mechanism
h. Evidence of tax payments or tax waivers, where applicable
i. All applicable fees associated with the service
Step 3; Sign and submit the declaration FORM DLG 002 confirming that the information provided by you is accurate, your business is legitimate, and will continue to operate in compliance with the prevailing and applicable laws. The declaration form is to be signed by two (2) directors of the company.
Upon satisfying the above requirements and submitting the relevant forms, the applicant company will be granted either a full approval (if it has completely satisfied the FCCPC requirements) or a conditional approval (if the applicant hasn’t satisfied all of the FCCPC requirements).
In a bid to address the privacy rights violations and other illegal debt recovery practices by most digital money lenders, the FCCPC’s registration framework is a temporary solution for consumers in general, as a comprehensive law or regulation is expected to emerge in the future.
If you have further questions on any aspect of this process or need us to assist you with the application process, do not hesitate to reach out to us here or here and we will be delighted to assist you.