The Federal Competition and Consumer Protection Commission (FCCPC) has set a new rules—called Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025—for any digital or online lenders caught involving in unethical conducts and other violations.
The law, released in July 2025, imposes fines between ₦50 million and ₦100 million to online or digital lenders that violate the terms and conditions. Or if the lenders cannot pay that amount, they'll surrender 1% of their annual turnover. This law draws from the 2022 framework aimed at stamping out illegal activities and tightening sector regulation.
The consumer lending market is estimated to $2.1 billion in Nigeria, FCCPC's introduction of the new law is for the purpose of regulating this market; the market traditional banks have long avoided due to high default rates.
It also aligns with the broader changes that have happened in the Africa’s consumer lending market, such where the Central Bank of Kenya (CBK) has recently release of a draft framework for non-deposit-taking credit providers.
However, before this new policy was set, FCCPC will delist the app of unethical lenders, raid and close down their offices, and disrupt their operations. Now, the commission has made it clearer; any business or individual found guilty of violating any of its laws will be fined.
The commission stated that individual will be slammed with a fine worth ₦50 million, and a company or business will be fined ₦100 million or 1% of its previous year’s turnover. Many Nigerian online or digital lenders usually involve in unethical behaviour such as threatening debtors and their contacts.
Other unethical conducts and behaviors that could breach FCCPC includes:
- Harassment and intimidation of loan defaulters
- Public shaming of defaulters
- Excessive or hidden fees on loans
- False advertising that promises low interest rates and “no hidden charges.”
- Misuse of personal data such as selling borrower information or using it for purposes unrelated to the loan.
- Predatory lending: An act of targeting vulnerable individuals with loans they cannot repay at exorbitant interest rates.
- Unlawful deductions from borrower's bank without permission.
All these misconducts are red flags under the new FCCPC's Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025. In addition to the penalty imposed on the lenders, the lending platform's directors will also face sanctions for up to five years.
The FCCPC's New Law is Consumer-Centered
Majority of the rules are centered on prioritizing consumers' safety in the Nigeria's lending space. The rules require lenders to limit their excessive advertisements, stop unsolicited promotions, clearly disclose all charges, and issue loans only to borrowers who can demonstrate the ability to repay.
Many lenders charge high interest rates, FCCPC has described this act as "exploitative" act, and the commission has dedicated itself that it "shall periodically monitor interest rate for services of consumer lending, and ensure rates are not exploitative and inimical to consumer interest."
Lenders Must Now Register and Get Licenses
The FCCPC's Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025 doesn't only imposed fines and penalties on unethical lenders in Nigeria, it also introduces registration and renewal fees and requires fair treatment of borrowers.
This regulatory extension applies to all business organizations. Be it physically operated or electronically operated, be it small-medium enterprises or large scale fintech companies, so far you're providing lending services to consumers, you're still under the FCCPC’s purview.
In fact, Airtime lending, which powered MTN’s ₦83.19 billion fintech revenue in H1 2025 and lending platforms licensed by states but operating across state borders to extends lending services to players in already regulated industries are still under the FCCPC’s purview. No one is left out, and the rule is simple; you provide loans come and register.
However, it's important to note that only fintech and companies operating as a microfinance bank under the Central Bank of Nigeria (CBN) license are not affected by the FCCPC new regulations. Even with that, Lendsqr said they must seek a waiver.
Quick Note: In that context, a waiver means official permission to be excused from a rule or requirement. So even though microfinance banks are generally exempt from the new regulation, they still have to apply for and receive formal approval (the waiver) from the authorities before that exemption actually applies to them. It’s like being “automatically eligible” for an exception—but you still have to fill out the paperwork and get it signed off.
Lenders Licensing and Approvals
The Lending Licenses are categorized into two: License for Mobile Money Operators (MMOs) and Payments Services Banks (PSBs) such as MTN’s MoMo and Airtel’s SmartCash and License for existing digital lending platforms. The already operating digital lenders in Nigeria are estimated to 461 as of early August 2025.
Mobile Money Operators (MMOs) and Payments Services Banks (PSBs) will pay ₦100,000 application fee and ₦1 million upon approval to obtain their Licenses. On the other hand, the existing 462 digital lenders will also pay ₦1 million to secure licenses. The ₦1 million License will only cover two loan apps.
FCCPC declared that to add more app, they'll need to pay ₦500,000 for each app added under the license. In addition to that, the ownership under each License is capped at five. So, if a lender has one licensed company, that company can run up to five apps. In other words, no entity can exceed five apps in total under a single approval.
However, initial approvals are valid for only three years and must be renewed by March 31 of the following year. According to the Commission, each approval granted under these regulations will lapse on December 31 of the third calendar year after its issuance. Meanwhile, note that from the date of first renewal, new approvals must be renewed every 36 months.
In addition to that, Lenders are now subjected to a ₦500,000 annual levy. They must undergo audits, submit biannual reports to the FCCPC, file annual returns, and provide requested records within 48 hours. Lenders already active in the sector have 90 days to meet these requirements. Furthermore, they must also comply with the Nigerian Data Protection Act 2023, the Nigerian Communications Act 2003, and other applicable regulatory standards like the ones set by the CBN.
Challenges for Lenders
Some prominent figures in the lending space have commended the FCCPC's new regulations. They appreciate the new rules because it seeks to establish stability within the sector, protect consumers in the sector, and reflect the maturing of the sector.
Adedeji Olowe, founder of Lendsqr, wrote via his LinkedIn profile that digital lending in Nigeria has moved beyond being a casual venture (side hustle) and is now firmly part of the financial system, where it will be regulated accordingly.
However, they’ve also called for a balanced and flexible regulatory framework that can evolve with changing consumer needs.
Gbemi Adelekan, president of the Money Lenders Association (MLA), stated that certain FCCPC regulations could substantially affect service delivery costs, technology use, and access to financial services—factors that may ultimately shape pricing and consumer behaviour.
