The number of companies registered and licensed to provide digital lending services through mobile apps has increased to 425 as of May 2025, up from 320 recorded last year.
The 425 companies are those that have either secured approval from the Federal Competition and Consumer Protection Commission (FCCPC) or been licensed by the Central Bank of Nigeria to provide digital lending services.
A look at the database of the FCCPC shows that 362 of the digital lenders have been granted full approval by the Commission, while 42 others are operating with conditional approval.
The database also includes 21 companies licensed by the CBN.
However, the growing number of players is also fueling an increase in the rate of indebtedness by borrowers, who move from one lender to another to rack up credits without repaying.
According to the lenders, the inefficiency of the existing credit bureaus in the country is adding to the problem, while some lenders, pushed by competition, are jettisoning credit history to give out loans indiscriminately.
Ex-bankers behind the numbers
According to the Chairman of the Money Lenders Association, the umbrella body of the registered loan app companies in Nigeria, Mr. Gbemi Adelekan, many retired bankers are moving into the digital lending space to remain active in the financial system, hence the growing number of players.
He noted that digital lending has also become the choice for many companies because of the ease of entry.
“If you think of microfinance, the regulation is tighter and the licence is costly. This is why many companies are coming into the space,” he said.
But according to him, the major concern is how Nigerians are using the various platforms to rack up loans without servicing them.
Adelekan observed that the new players, out of their aggressive push to win customers, often push out loans without checking the credit history of the borrowers.
“When they (new players) come on board, they don’t want to start small. They just want to acquire as many customers immediately as possible.
“So, they push out money. What they do is that when you apply for N50,000, because it’s your first time, they will tell you that, “okay, let’s start with N5,000.
“With that, people are just going around collecting N5,000 loan here and there without repaying,” he said.
Inefficient credit reporting system
While acknowledging that credit bureaus in Nigeria are trying their best to make credit history reports of Nigerians available when requested, he said the process is not efficient enough to meet up with the growing demand for instant loans being offered by digital lenders.
According to him, getting a credit history report summary could be instant the updates are not real-time, it could take one month to reflect, which is not ideal for loans that have to be disbursed within 24 hours or less.
“So, within the 30-day period when a credit report was noted as clean, some unscrupulous individuals can go on to apply to many lenders and the default will not be reflected until after 30days cycle.
“Just last week, my people received the report of someone who is owing 35 digital lenders and wanted to collect another loan,” he said.
- The CEO of Nigeria Consumer Credit Corporation (CREDICORP), Mr. Uzoma Nwagba, also corroborated this in an interview with Nairametrics, noting that the Nigerian credit reporting regime needs a major rework.
- According to him, while there is a credit reporting Act that mandates that commercial banks report everybody’s borrowing to credit bureaus, the reports do not get to all the credit registries, thus creating loopholes.
He, however, disclosed that CREDICORP and the CBN are currently reviewing the credit reporting regime and would soon approach the National Assembly with an executive bill to amend the existing.
“If you’re owing any institution and you want to renew your international passport, you should not be able to, or at least you should be made to pay before you can.
“Landlords should be able to check your credits if they want to let their house to you. Those things are important, so that your credit behavior follows you everywhere you go,” he said.
Menace of unregistered loan apps continue
Meanwhile, despite the rise in the number of digital leaders that have registered with the FCCPC and secured approval to operate, hundreds of other unregistered lenders are still playing in the market and getting patronage from desperate borrowers.
- As a result of their continuous atrocities, which include defaming and harassing their customers through their contacts, the FCCPC said it has now placed 88 loan apps under its watchlist as it continues to work out modalities to sanitize the digital lending space, while 47 have been delisted from the Google Play Store.
- According to the Executive Commissioner of Operations at the FCCPC, Dr. Adamu Abdulahi, the main aim of the registration and approval of digital lenders in the country is to identify the companies behind the apps through its Interim Regulation to be able to hold them responsible for any infraction.
- He noted that before the regulation, there was no way to trace any of the companies operating the loan apps.
Abdullahi said the Commission is also trying to strike a balance between the continuous operations of the loan apps and the customers’ defaulting in repaying their loans, adding that despite the challenges, loan apps are playing important roles in the economy.
