Nigeria’s New Digital Lending Rules Bring Heavy Fines

Digital lenders in Nigeria now face tougher regulations as the Federal Competition and Consumer Protection Commission (FCCPC) rolls out new penalties for misconduct. Under the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025, companies found guilty of unethical practices could be fined up to ₦100 million or 1% of their annual turnover.

The updated framework builds on the FCCPC’s 2022 rules, which had focused on cracking down on harassment, public shaming, and other abusive recovery tactics. This latest effort targets a market valued at over $2.1 billion, aiming to improve transparency and protect consumers.

From App Raids to Defined Sanctions

In the past, regulators relied on raids, app removals, and operational freezes to tackle violators. Now, the FCCPC has codified standard penalties. Individuals who breach the rules risk fines of up to ₦50 million, while company directors can face sanctions lasting five years.

“Any person or undertaking found to be in contravention of these Regulations shall be liable to sanctions, which may include fines, suspension of operations, or delisting,” the commission stated.

The law also extends FCCPC authority to airtime lending — a service that contributed ₦83.19 billion to MTN’s fintech revenue in the first half of 2025. Only microfinance banks are exempt, and even they must apply for a waiver.

Costs, Compliance, and Consumer Protection

Licence applications will cost ₦100,000, with approvals for mobile money operators such as MTN’s MoMo and Airtel’s SmartCash set at ₦1 million. Existing digital lenders — currently 461 in number — will pay the same amount for approval covering two apps, with additional apps costing ₦500,000 each.

Approvals last three years and must be renewed by 31 March of the following cycle. A ₦500,000 annual levy will also apply.

The regulation’s core focus remains consumer safety. It requires fair advertising, bans unsolicited marketing, enforces transparency on all fees, and limits loans to borrowers who can repay. Interest rates will be monitored to ensure they are “not exploitative and inimical to consumer interest.”

Industry Reaction and Outlook

Gbemi Adelekan, president of the Money Lenders Association, praised the regulation’s intent but warned of operational impacts. “Some of the rules may have a significant impact on the cost of service provision, technology, and accessibility of financial services, which in turn can influence pricing and consumer behaviour,” he said.

Adedeji Olowe, founder of lending software provider Lendsqr, viewed the changes as a sign of maturity in the industry. “Digital lending isn’t a side hustle anymore. It is part of the financial system, and it is going to be treated that way,” he wrote on LinkedIn.

With a 90-day compliance deadline, Nigeria’s digital lending ecosystem is entering a new era — one where lenders will need to balance growth ambitions with strict adherence to regulatory demands.