Introduction

Digital lending business has grown extensively, especially with the high cost of living. Again, digital lending has simplified lending processes and procedures for small business owners, salary earners, and even first-time borrowers to access quick credit through apps and online platforms without collateral. However, this innovation came with recurring problems such as excessive interest rates, hidden fees, unethical debt recovery procedures, and privacy violations.

After constant complaints from customers and in a bid to address these concerns, the Federal Competition and Consumer Protection Commission (FCCPC) introduced the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations 2025 (the Regulation). It is assumed that this regulation has replaced the interim guidelines of 2022 to ensure consumers are treated fairly.

Which entities or activities does the Regulations Cover?

The Regulation applies to any digital, electronic, online, or non-traditional consumer lending activity in Nigeria, such as:

1. Cash-based consumer loans delivered through apps or websites
2. Airtime or data advances
3. Cashback or barter arrangements that have a verifiable monetary value
4. Partners, vendors, agents, and technology providers that share in the revenue or play an active role in loan delivery.

Please note that the Regulation exempts Banks and other financial institutions licensed under the Banks and Other Financial Institutions Act (BOFIA) from its scope. Again, businesses that are already under the exclusive supervision of another regulator, such as the Central Bank of Nigeria (CBN), may be exempt from this law, provided that the FCCPC and that regulator have an established coordination mechanism.

Can Digital Lending Businesses Operate Without FCCPC Approval?

No, the Regulation does not allow these entities to operate a digital lending business without FCCPC approval, even after obtaining other applicable licenses. Existing businesses are expected to register with FCCPC within 90 days of the commencement of the law. New applicants on the other hand, are expected to obtain approval from FCCPC before launching operations.

Requirements for Registering with FCCPC

1. Certificate of incorporation, CAC Status Report, or Memorandum and Articles of Association
2. Filling of the prescribed forms
3. Operational license where applicable
4. Detailed list and profile of members of the Board of Directors and key management personnel
5. List of shareholders and beneficial owners
6. Financial statements for at least the three (3) years preceding the application
7. Standard terms for the provision of lending services to borrowers, or consumer lending contract
8. consumer lending service agreement or other ancillary agreements
9. Company’s terms of use
10. Company’s privacy policy
11. Company’s code of conduct.
12. Audit trust mark from the Nigerian Data Protection Commission.
13. Compliance audit report and privacy impact assessment report from a duly registered Data Protection Compliance Organization
14. A brief description of the business, and where relevant, its groups, subsidiaries, and affiliates
15. Organogram showing the role players, and the location of key role players and any operational approving authorities.
16. Details of a person within the business who is authorized to accept all correspondence and service on the business’s behalf
17. Evidence of membership in any trade or professional associations.
18. Any or all Service Level Agreements with any service providers with respect to operations, excluding administration
19. Evidence of feedback and complaint resolution mechanism
20. Evidence of tax payments or tax waivers (where applicable)
21. Such other documents or details as the Commission may request from time to time
22. Payment of the prescribed fees

Cost of Registration

1. Non-refundable application fee-₦100,000
2. Approval fee-₦1,000,000

What Does the Registration Cost Cover?

The registration cost covers two (2) apps. Applicants that are desirous of registering additional apps are expected to pay an additional registration fee of Five Hundred Thousand (₦500,000) for each additional app. The maximum an applicant is allowed to register is five (5) apps.

Is the registration renewable?

Yes, registration is valid for three years, and it is renewable every three (3) years. Please ensure that it is renewed not later than March 31^st of the following year. Subsequent renewals shall be made subject to the payment of the prescribed annual levy.

Post Registration Obligations

After registration, lending service providers are required to comply with the following:

1. Maintain comprehensive records of all consumer lending transactions, including complaints consumers received, and their resolutions.
2. Submit biannual reports to the Commission, including consumer transactions, transaction values, interest rates charged, and records of complaints and their resolutions.
3. File annual returns with the Commission not later than March 31 of each year. This return must cover the lending activities, consumer complaints, and audited financial statements.
4. Payment of the prescribed annual levy in the sum of Five Hundred Thousand Naira only (₦500,000) or any other amount as the commission may deem fit

Other Regulatory Requirements from Digital Lenders

1. Before a borrower accepts a loan, the lender must clearly display:
2. The interest rate, repayment schedule, fees, and total cost of credit
3. Consequences of default and the borrower’s rights to dispute any charge
4. Advertising must be truthful and not misleading, as any representation that could deceive or pressure consumers will attract sanctions.
5. Lenders must fully comply with the Nigeria Data Protection Act by ensuring that there is:
6. No unauthorized access to borrowers’ contacts, photos, or messages
7. No data sharing without consent
8. Proper storage, retention, and deletion protocols.
9. Every customer, upon request, must be provided with a statement or history of service utilization within 24 (twenty-four) hours of making the request.
10. A credit-worthiness assessment must be performed on borrowers before granting loans to prevent the lender from losing its money in the borrower’s debt cycles.
11. Lenders must maintain a transparent, accessible complaint-resolution process and record every complaint for FCCPC inspection.

Penalties for Non-Compliance

1. Corporate fines of up to ₦100 million or 1% of the company’s annual turnover, whichever is higher
2. Individual penalties for directors or managers — including fines up to ₦50 million, suspension, or disqualification from holding office for up to five years
3. Revocation of approvals
4. Closure of business operations

Conclusion

The FCCPC Digital, Electronic, Online, and Non-Traditional Consumer Lending Regulations 2025 is one law that marks the turning point in Nigeria’s financial technology industry. For consumers, this would help ensure transparency, fair treatment, and data privacy. For lenders, it would ensure accountability, proper governance, and sustainable practices.

Going forward, existing digital lenders should carry out an internal audit to review existing consumer lending contracts to eliminate unfair terms and ensure that their lending operations follow the Regulations. If you need help with implementing the Regulations, Kindly reach out to Firmus Advisory and we would be happy to help.