The Federal Competition and Consumer Protection Commission (the "Commission") on July 24, 2025 introduced the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulation 2025 (the "Regulation").
In 2022, the Commission had issued the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending which sought to regulate the affairs of all digital lenders via registration with the FCCPC. Subsequently, the Commission issued the Regulation, which applies to consumer lending transactions involving cash, airtime, data, and other forms of barter in exchange for specific or verifiable monetary value. The Regulation provides comprehensive guidance on the requirement for registration of lending service providers, consumer protection measures and penalties for default or unethical practices.
In this newsletter, we highlight some of the key provisions of the new Regulation and their impact on consumer lending.
What is the Scope of the Regulation?
This Regulation applies to all transactions involving the provision of unsecured loans whether in the form of airtime or data advances, cash, cashback, or other services exchanged for specific or verifiable monetary value through any digital, electronic, online, or other non-traditional channels. It further extends to entities or individuals who derive, or undertake to derive, a share of the revenue generated from such consumer lending services, whether as primary or secondary lenders, partners, service providers, collaborators, or vendors.
More specifically, the Regulation requires that the following persons intending to provide or participate in a lending transaction, as described below, shall obtain the approval of the Commission:
- Any entity providing consumer lending services directly to consumers, or offering ancillary services in support of such transactions, must register with the Commission.
- Entities intending to partner for the purpose of offering consumer lending services, the proposed partnership agreement must be submitted to the Commission for prior review and approval.
- Entities providing or intending to provide consumer lending services are prohibited from entering into any agreement, joint venture, or similar arrangement with an entity regulated by another regulator, except where such entity holds a valid license or approval authorizing it to carry out such activities.
- Where collaboration involves fee-sharing, joint operations, strategic alliances, or similar arrangements with an entity licensed by another regulator for the purpose of consumer lending, the parties must execute a Consumer Lending Service Agreement and obtain the Commission's approval before commencing operations.
In addition, the Regulation exempts Banks and other financial institutions licensed under the Banks and Other Financial Institutions Act from its scope.
Registration by Providers of Consumer Lending Services
Under the Regulation, entities to which the Regulation applies are required to register with the FCCPC within 90 days from its commencement date.
To register with the Commission, an entity is required to submit the following documents:
- consumer lending service agreement or other ancillary agreements;
- completed application forms as prescribed by the Commission;
- incorporation documents;
- details of directors and key management personnel;
- list of shareholders, including beneficial owners;
- financial statements for at least the three (3) years preceding the application;
- standard terms for the provision of lending services to borrowers;
- proof of payment of the applicable fees, including a non-refundable application fee of ₦100,000 and an approval fee of ₦1,000,000 payable upon the Commission's approval, or such other amounts as the Commission may prescribe from time to time; and
- any other documents as may be requested by the Commission.
An approval issued by the Commission shall expire on December 31 of the third year from the date of issuance and must be renewed no later than March 31 of the following year. Subsequent renewals shall be carried out 36 months from the date of the first renewal.
Consumer Protection
The Regulation contains some salient provisions which seek to protect consumers of lending services. Some of the key provisions are highlighted below;
- Lending service providers are required to clearly display the terms of their services on their apps, websites, or other digital platforms. These terms must expressly disclose to borrowers the applicable interest rates, repayment conditions, and any other applicable fees.
- With respect to advertising, the Regulation mandates that all promotional content must be factual and free from misleading claims or exaggerated representations of the benefits of the lending service.
- In delivering their services, providers must adhere strictly to the terms offered and may not vary these terms from one borrower to another, except where such variations are expressly provided for. The Regulation further prohibits unfair contract terms particularly those that create a significant imbalance between the rights of the provider and the borrower.
- As is now standard practice, lending service providers must ensure full compliance with the Nigeria Data Protection Act when processing customer data.
Reporting Requirement by Lending Service Providers.
Once registered and approved by the Commission, lending service providers are required to comply with the following reporting requirements:
- Maintaining comprehensive records of all consumer lending transactions, including complaints of consumers received and their resolution.
- Submitting biannual reports to the Commission detailing consumer transactions, transaction values, interest rates charged, and records of complaints and their resolution.
- Filing annual returns with the Commission no later than March 31 of each year, covering the provider's lending activities, consumer complaints, and audited financial statements.
Penalties for infringement of the Provision of the Regulation.
The Regulation has also introduced clear and standardized sanctions for unethical practices and non-compliance with the provisions of the Regulation.
For instance, any entity found in breach of the Regulation shall be subject to penalties, which may include monetary fines, revocation of approval, or suspension of operations. Where a fine is imposed, the defaulting entity shall be liable to pay ₦100,000,000 or 1% of its annual turnover, whichever is greater. In addition, each director of a defaulting lending service provider shall be liable to pay a fine of ₦50,000,000 and/or disqualification from serving as a director for a period of five (5) years.
Conclusion
The introduction of the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulation 2025 marks a significant step in strengthening oversight of Nigeria's fast-growing digital lending sector. However, the Regulation is notably silent on the status of approvals previously granted under the 2022 Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending. It is unclear whether such approvals will automatically transition into the new regime or if affected entities will be required to undergo a fresh application process.
At its core, the Regulation seeks to promote transparency, curb unethical practices, safeguard consumers and provides clarity for service providers by setting standardized compliance obligations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
