The number of companies officially registered as digital lenders, popularly known as loan apps, has surged in the past months, reaching a total of 492 in October as more companies registered to escape N100 million fine.
This comes as the Federal Competition and Consumer Protection Commission (FCCPC) implements a new rule targeted at all digital lenders in the country.
Under the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025, which came into effect on July 21, 2025, all digital lenders operating in the country must register with the FCCPC within 90 days of commencement.
According to the Commission, non-compliant operators face sanctions, which may include fines of up to N100 million or 19% of turnover, as well as potential disqualification of directors for up to five years.
Lenders rush to register
As of May this year, the number of registered digital lenders, including those licensed by the Central Bank of Nigeria (CBN), stood at 425, according to FCCPC’s data.
This indicates that 67 companies had approached the industry watchdog for registration in the last four to five months.
- FCCPC’s database shows that out of the 492 registered companies, 434 of them have been given full approval by the Commission, while 36 of them have secured conditional approval from the Commission.
- The remaining 22 are those licensed by the CBN. CBN-licensed lenders are exempted from FCCPC registration but the Commission still keeps a tab on them.
- Despite the large number of registered lenders, the Commission said 103 other loan companies have been placed under its watchlist for regulatory actions.
The new regulations: Why it matters
According to the Executive Vice Chairman/Chief Executive Officer, Mr. Tunji Bello, the new regulations for digital lenders became necessary in the face of the rising unethical practices in the digital lending space.
“For too long, Nigerians have endured harassment, data breaches, and unethical practices by unregulated digital lenders. These regulations draw a clear line that innovation is welcome, but not at the expense of the rights and dignity of consumers, or the rule of law,” Bello stated.
“These Regulations provide the legal tools to hold violators accountable and promote responsible digital finance. No consumer should be harassed, defamed, or lured into unsustainable debt under the guise of digital lending,” he added.
Key provisions of the 2025 lending regulations
The Regulations establish a robust legal framework to register, monitor, and sanction all forms of digital and non-traditional lending in Nigeria.
Applicable to all unsecured consumer lending conducted through electronic, online, mobile, or other non-traditional means, the regulations set out clear requirements for registration, transparency, data privacy, ethical recovery, fair interest rates, and responsible lending.
- It prohibits pre-authorised or automatic lending, compels clear and accessible loan terms, bans unethical marketing, and mandates local ownership of at least one service provider for airtime and data lending services.
- It also requires joint registration of all lender partnerships and prohibits monopolistic or dominance-based agreements without prior Commission approval.
- The new Regulations also prohibit apps from accessing contact lists, pictures, and transactions of their customers.
According to the President of the Money Lenders Association (MLA), Mr. Gbemi Adelekan, some lenders have been misusing such access to harass customers and engage in other unethical practices.
“It’s a good step in the right direction for the ecosystem,” he said, adding that this would force many lenders to start using the credit bureau for debt recovery.
He also noted that the group supports the regulation that mandates lenders to clearly state the conditions of their loans, including tenor, interest rates, and repayment plans.
Adelekan observed that the number of players in the digital lending space has been growing in recent times because many retired bankers are moving into the space to remain active in the financial system.
He noted that digital lending has also become the choice for many companies because of the ease of entry compared with other financial services like Microfinance banking, which requires rigorous licence processing.
What you should know
The new regulation builds on the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022, which made it mandatory for all digital money lenders in the country to be registered.
- Despite the registration drive aimed at sanitizing the digital lending space, cases of harassment and defamation of borrowers have remained rampant. Sanctions for such acts include delisting or removal of apps from the Google Play Store.
- However, with the new rule, the FCCPC is going tougher on perpetrators of unethical practices in the digital lending market.
- The Commission maintains that it will continue to work with the CBN, Google, and other stakeholders to ensure full enforcement.
Time to fast forward to the end….CBN needs to step in and cap interest rates & maximum total of the loan amount that can be paid back for pay day lenders.
This is a hat brought sanity to these loan operators in thr uk….if you borrow / lend out N100 the max you can pay back in total is 300% of the loaned amount – I.e. N300 or cap their lending rates to 5% above the MPR rate…or both – till then, if this is not done predatory lending practices will continue.
It was when the U.K. made such rules that sanity was restored….till then, it will always be a mess in Nigeria.
Our leaders are wicked; they allow anything to happen. We have LAPO, microfinance banks, and commercial banks, yet none of them will give loans. Instead, they’ve empowered demonic loan sharks to serve the masses at 21% interest per month. To make matters worse, they want to remove mathematics from schools so people can’t calculate the interest. I’d bet that these bank managers and top CBN directors are the real owners of these loan sharks, which explains why they’ve made it even more difficult for banks to lend a penny, even to those with good credit scores.