In a bid to protect consumers from unfair and unethical practices in the lending space, the Federal Competition and Consumer Protection Commission announced the implementation of a new set of regulations known as the Digital Electronic Online and Non-traditional Consumer Lending Regulation 2025 for the effective regulation of digital lending in Nigeria. This article will examine the key features of the regulation and its impact on businesses, partners, and other key stakeholders in the industry.
Key Features of the Regulation
1. Applicability
The Digital Electronic Online and Non-traditional Consumer Lending Regulation 2025 applies to all unsecured consumer lending transactions done digitally, electronically, online, or through non-traditional means. It covers lending in cash, airtime, data, cashback, or barter in exchange for services done for a specific monetary value by lenders or service providers, with the expectation of return either in cash or together with or without associated interest. It equally applies to all parties, undertakings, or providers involved in the transaction as primary and secondary lenders, vendors, service providers, third parties, and collaborators involved with the lender, as well as parties, undertakings doing business in Nigeria, either physically or otherwise, provided such business carries on commercial activity.[1]
2. Eligibility and Registration
All lenders and lending service providers are to apply for a licence with the FCCPC within 90 days from the commencement of the Regulation.[2] All undertakings participating in consumer lending services under an agreement, joint venture, other mutual understanding, or partnership are to register to obtain their license from FCCPC or risk being prohibited from entering into such agreement.[3] Where the license or approval expires after entering into such an agreement, the agreement shall be subject to termination.[4] The undertaking is expected to register such an agreement with the FCCPC. Furthermore, undertaking or businesses offering lending services and doing business in Nigeria are required to register with the Corporate Affairs Commission.[5]
3. Partnership Requirements
Where an undertaking is desirous of going into partnership with another undertaking for the purpose of rendering consumer lending services, such partnership agreements or contracts must be presented for registration alongside the application for license with the FCCPC. Additionally, every regulated undertaking and lending service provider desirous of collaborating to provide consumer lending services is to enter into an agreement known as the Consumer Lending Service Agreement. The undertakings, though different, will be treated as a joint and single application.[6] They must apply to the FCCPC for approval to operate and to register the agreement. This approval must be obtained before the implementation of such an agreement.[7]
It is worthy of note that any modification, alteration, subcontract, or amendment made to the agreement must be made with the due approval of the Commission; otherwise, such agreement stands terminated.[8]
4. Timeline for Approval
The FCCPC reserves the right to approve or reject applications. Where an application has been submitted, it takes about 30 days from the time of submission for it to be assessed and reviewed. However, the Commission reserves the right to extend the time as it deems fit.[9]
5. Application and Renewal Fee
The following fees apply for application and renewal:
Application Fee: ₦100,000 (non-refundable)
Approval Fee for Digital Lenders: ₦1,000,000 (covers up to two apps)
Additional Apps: ₦500,000 each (maximum of five apps allowed)
Renewal Fee: ₦500,000
Approvals are valid for one year initially, after which renewals are required every 36 months and are subject to a renewal levy. This shifts registration from a one-time administrative process to an ongoing licensing requirement, with clear timelines, recurring costs, and renewal obligations that compliance teams and founders must plan for.[10] It is interesting to note that upon approval, Digital Money Lenders, Mobile Money Operators, and others who offer lending services in the form of airtime and data are to pay an approval fee of N1,000,000.[11] By implication, the application fee is separate from the approval fee, and both fees are non-refundable.
6. Revocation of Approval
An application for approval of either Consumer Lending Services or/ an Agreement can be revoked based on the following grounds:
a. Where the applicant makes a false or misleading statement to the Commission
b. Where there is a violation of the provisions of the regulation or associated regulations
c. Where the regulated undertaking or licensed service provider engages in conduct that is against the customer or against the regulation or orders of a judicial or quasi-judicial authority in a way that inhibits their integrity and transparency.
7. Stringent Penalties for Non-Compliance
Non-compliance with the Lending Regulations attracts heavy sanctions aimed at deterring violations and ensuring strict adherence within the digital lending industry. Individuals may face fines of up to ₦50,000,000, while corporate entities risk penalties of up to ₦100,000,000 or 1% of their annual turnover, whichever is higher. In addition, directors can be held personally liable, facing fines or disqualification from serving as directors for up to five years if their companies breach the regulations.[12]
8. Complaint Handling and Redress
To ensure transparency and protect consumers, the Lending Regulations require lenders and service providers to disclose clear lending terms, fees, and conditions in plain English, notify consumers accordingly, submit bi-annual reports and annual returns to the FCCPC, and maintain accurate records of transactions and complaints for at least five years.[13]
How Does This Affect Businesses?
The Lending Regulation imposes stricter compliance obligations, higher entry and operational costs, and consumer-focused requirements. While it raises barriers for smaller players and increases legal/operational expenses, it also promotes fair competition, strengthens FCCPC enforcement powers, and requires robust customer service and compliance systems to manage reputational risk.
Conclusion
This regulation is designed to integrate and formalize Nigeria’s digital lending market, protect consumers, and ensure fair competition. For businesses, it means higher compliance costs, stricter monitoring, and the need for transparent, consumer-friendly practices. Additionally, it also creates a level playing field by eliminating exploitative and unlicensed operators.
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[1] Regulation 3
[2] Regulation 7
[3] Regulation 8
[4] Regulation 9
[5] ibid
[6] Regulation 12 (2)
[7] Regulation 12
[8] Regulation 11
[9] Ibid 14 (4)
[10] https://blog.lendsqr.com/fccpc-new-consumer-lending-regulation/
[11] Regulation 15(2)
[12] Regulation 27
[13] Regulation 22
