Digital lenders resist ₦100m fines for unethical conduct

Digital lenders in Nigeria now danger fines between ₦50 million and ₦100 million, or 1% of their annual turnover, for unethical conduct and different violations below new guidelines launched by the Federal Competitors and Shopper Safety Fee (FCCPC).

The newly issued Digital, Digital, On-line, or Non-Conventional Shopper Lending Rules, 2025, launched in July, symbolize the fee’s newest effort to manage the nation’s $2.1 billion client lending market, which even banks have lengthy prevented as a result of excessive default charges. 

It builds upon its 2022 framework, which aimed to curb unlawful actions and enhance regulation within the sector. It additionally aligns with regulatory shifts within the continent’s strategy to client lending, with the Central Financial institution of Kenya lately publishing a draft non-deposit-taking credit score suppliers regulation. 

Beforehand, penalties for unethical behaviour—akin to threatening debtors and their contacts—  in Nigeria’s digital lending area consisted of workplace raids, app delistings, and operational disruptions.

Now, the FCCPC has clearly outlined customary penalties. A person responsible of breaching any of its rules may be fined as much as ₦50 million, whereas an organization might face ₦100 million or 1% of its earlier yr’s turnover, whichever is larger. Firm administrators additionally danger sanctions for as much as 5 years.

“Any individual or enterprise discovered to be in contravention of the provisions of those Rules shall be liable to sanctions, which can embody fines, suspension of operations, or delisting of their registration, or revocation of approval,” the fee said.

Along with fines and penalties, the brand new legislation introduces registration and renewal charges and requires truthful therapy of shoppers. It applies to all enterprise entities—bodily or digital—that present lending providers, together with these licensed by states however working throughout state borders, and extends to gamers in already regulated industries. Airtime lending, which powered MTN’s ₦83.19 billion fintech income in H1 2025, is now below the FCCPC’s purview.

Solely microfinance banks are exempt, and even they need to search a waiver, in accordance with lending software program agency Lendsqr.

Licence purposes value ₦100,000, with approval charges set at ₦1 million for cellular cash operators akin to MTN’s MoMo and Airtel’s SmartCash, or as decided by the fee.

Present digital lenders — 461 as of early August — will even pay ₦1 million, or as decided by the fee, for approval, overlaying solely two apps. Additional apps value ₦500,000 every, and possession is capped at 5.

Preliminary approvals will expire after three years and should be renewed by 31 March of the next yr. “An approval issued by the Fee in accordance with these rules shall expire on thirty first December of the third calendar yr from the issuance date…” it added.

Approvals should be renewed each 36 months from the date of the primary renewal, and corporations at the moment are topic to a ₦500,000 annual levy, or a payment set by the fee.

A major side of the regulation centres on buyer security. It stipulates that lenders should restrict promoting, stop unsolicited advertising and marketing, be clear about all charges, and approve loans just for debtors able to compensation.

Rates of interest—lots of which have been described as exploitative—will now be monitored by the FCCPC.

“The Fee shall periodically monitor rate of interest for providers of client lending, and guarantee charges usually are not exploitative and inimical to client curiosity,” it mentioned.

Operators should additionally adhere to the Nigerian Information Safety Act 2023, the Nigerian Communications Act 2003, and different relevant legal guidelines. Lenders should endure audits, submit biannual reviews to the FCCPC, file annual returns, and produce data inside 48 hours of request. Entities already working within the sector have 90 days to conform.

Gbemi Adelekan, president of the Cash Lenders Affiliation (MLA), counseled the brand new regulation, noting that it seeks to determine stability inside the sector and shield shoppers.

“Nevertheless, a few of the guidelines as said could have a major affect on the price of service provision, expertise, accessibility of economic providers, which in flip can affect pricing of our providers and client behaviour,” he mentioned.

He known as for a balanced and adaptable regulatory atmosphere that may adapt to altering client wants.  

Adedeji Olowe, founding father of Lendsqr, highlighted that the brand new legislation displays the maturing of the sector. “Digital lending isn’t a aspect hustle anymore. It’s a part of the monetary system, and it’ll be handled that method,” he wrote in a LinkedIn submit on Monday, August 11.

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