The need for expansion, the insatiable desire of individuals for money as in this case, as led to the idea of lending of money to meet the unending need of individuals, even companies for expansion or growth. And the present state of our economy, the need and demand for money has multiplied immensely.

Financial institutions, the banks and the microfinance banks evolve to meet these needs and demands of loans. However, the demands by this banks encountered by borrowers in getting these loans from the banks, which includes credit worthiness requirements and huge collateral to be satisfied, this has led borrowers to ameliorate the aforesaid stringent requirement of through Money lenders who loan out money on low or no interest rates and often do not require collateral.

Money lending is carried out by both companies and individuals, and this venture is on the rise. Only persons licensed to be moneylenders by the relevant government authority are permitted to be moneylenders. For when the inevitable disputes arise, you require a valid License for any chance of a legal remedy.

For an individual or company to become a legitimate moneylender, the individual or company must obtain the Money Lender License to practice in Nigeria. The Money Lending Law of the various states in Nigeria regulates money lending business operation.

Section 4 of the MoneyLenders Law Chapter 7 Laws of Lagos State provides "that a person who lends money at interest or who lends a sum of money in consideration of a larger sum being repaid shall be presumed to be a money lender until contrary is proven". The purport of this section of the Money lenders Law is that for a person to become a legitimate money lender immune from contrary proof otherwise, the individual/corporate body must obtain the Money Lenders License to practice money lending in Nigeria.

Steps and Procedure for applying for a Money Lending License, is in TWO (2) Phases

First at the Magistrate court: Requirements for the application of a Money Lending License in Lagos.

- A covering letter (i.e. an application Letter addressed to the Chief Magistrate on a Letterhead with the list of documents that will be attached with the company seal affix on the applicant's letterhead.

- Such application shall be supported with the following relevant documents:

  • Certified True Copy of the CAC Incorporation Documents- CAC Form 1.1
  • Memorandum and Article of Association of the Company.
  • Certificate of Incorporation of the Company.
  • Tax Clearance for the individual applicant or Corporate Body, if it is a company newly incorporated, then provide evidence that the company is a registered taxpayer.
  • Three-year tax clearance for at least 2 directors of the company where the applicant is a company.
  • Police Clearance of the applying individual/ Corporate body [in Lagos, it is obtained from Commissioner of Police, Lagos State Command, Ikeja] [Note that this is different from the Police clearance to be taken to the Ministry vis-vis.
  • Reference Letter from the directors' bank.


Upon the due filing of the above documents, you shall be issued with two documents,

I. Letter from the Chief Magistrate Court Registry to the Permanent Secretary Ministry of Home affairs confirming due compliance and recommending the issuance of the money lending license certificate to the applying individual/ corporate body in question.


- After obtaining the necessary court documents, the applicant is to make a formal application to the Ministry of Home Affairs and Tourism with the relevant documents.

- Required to pay the sum of N25, 000 [Twenty-five thousand naira] for the purchase of the application form required for the regularization of Money Lenders Certificate, with attesting receipt to evidence payment.

- Also collect an invoice from the Ministry of Home Affairs revenue collection department for the payment of N200, 000 [Two hundred thousand naira]. This is for the payment of Money Lenders fee, which will be paid to the Government Account.

An Application for Regularization form will be issued, to be submitted together with the following list of documents-

  • A Covering Letter- (i.e. Application letter)
  • Money Lender Ordinance [Form B] 1938 – from Magistrate Court
  • Duly completed Form C- from Magistrate Court.
  • Police Report from Commissioner of Police showing- fingerprints of Directors/ Proprietors/ Trustees/ Applicants. [In Lagos, obtained from Lagos State Command, Alagbon]
  • 3-year Income Tax Clearance Certificate, [including current year] / Development Levy for each individual applicant/ Director/ Proprietor/Trustee.
  • Pay as You Earn [PAYE] Certificate, Tax Clearance of at least two [2] of its directors, and evidence of payment of company taxes.
  • Certificate of Incorporation of Company from Corporate Affairs Commission.
  • Evidence of payment of Application fees to the Lagos State Account.
  • Evidence of maintenance of a bank account with a reputable bank in Nigeria.


The final stage includes the visitation and physical inspection of the intended office by government officials. Upon visitation, if the company in question is already operating in the money lending activities, the books will be inspected in addition to the office. However, if the company is yet to commence business, inspection of the office premises and officers of the company shall suffice.

Lastly, If the company complies with the statutory requirements and upon the government officials' satisfaction, the applicant will be issued with the Money Lending License Certificate.


This is however necessary in order to protect the lender in case of defaulting borrower, so to be able to institute an action in court against such a person. Money lending Licenses issued by states has a one-year term. The license must be renewed annually.

The requirements for the renewal of money lenders license:

  • Application for renewal
  • Moneylenders ordinance (form B) from Magistrate Court
  • Duly completed and endorse (form C) from Chief Magistrate court
  • The previous license issued
  • Updated of the company and the directors tax clearance
  • Evidence of payment of renewal fee.
  • Re-visitation and inspection.

In conclusion, the certainty of Money Lenders as well as the business of money lending generally in Nigeria cannot be overemphasized, of which many of this companies have sprung up lately. It is therefore important you do the needful by obtaining a valid Money Lending License. For you to protect the company from defaulter who might seize the avenue of your non registration to deprive you of your money. Ignorance they say is no excuse in law.

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.