Digital money lending entails the provision of consumer loans through electronic channels to customers. Local and international investors can carry on the business of digital money lending in Nigeria subject to compliance with applicable laws and regulations. The provision of digital money lending services in Nigeria requires navigation and compliance with applicable legal requirements in Nigeria including the incorporation of a local company, obtaining an operational license, etc.
This article provides the legal and regulatory requirements that must be fully satisfied for any person to carry on the business of digital money lending in Nigeria.
Incorporation of a local company
A local company satisfying the share capital and directorship requirements must be incorporated with Corporate Affairs Commission (CAC) as a first step towards obtaining a money lending license in Nigeria. The share capital requirement for a money lending business varies across different states in Nigeria as money lending licenses are issued by the various individual states in Nigeria. In Lagos State, a money lending business must be incorporated with a minimum share capital of N20,000,000 (Twenty Million Naira) and must have a minimum of two directors. Notwithstanding the share capital requirement in Lagos State, a company having foreign participation must be incorporated with a minimum share capital of N100,000,000 (One Hundred Million Naira).
Read our previous article on How to Register a Company with Foreign Participation in Nigeria.
Obtain a Money Lending License
Money lenders license must be obtained for the purpose of providing traditional or digital money lending business from the appropriate state(s) in which the company intends to operate. The process of obtaining a money lenders license in Lagos State is therefore used as a case study as the processes are similar in all other states in Nigeria.
To obtain a money lenders license in Lagos State, the applicant must meet the following requirements:
- Provide evidence of company incorporation including certificate of registration, memorandum and articles of association and status report of the company.
- Police Clearance Certificate of two directors of the applicant company
- Three years Tax Clearance Certificate (TCC) for the applicant company and for at least two directors.
- Reference letter from the applicant’s bank in Nigeria
- Proof of payment of the money lenders application and processing fees
Upon satisfying the above requirements, an application for money lenders license in Lagos State would therefore be made to the Chief Magistrate of the Magisterial District where the applicant company is located. The Chief Magistrate issues a Lenders Certificate together with a letter addressed to the Permanent Secretary of the Lagos State Ministry of Home Affairs recommending the issuance of a money lenders license to the company. The Lagos State Ministry of Homes Affairs conducts a physical inspection of the applicant’s place of business and where it is satisfied that the applicant company has met all the statutory requirements, proceeds to issue the company with a money lending license to carry on the business of money lending in Lagos State. The money lenders license issued to the company by the Lagos State Ministry of Homes is subject to yearly renewal.
Registration with the Federal Competition and Consumer Protection Commission (FCCPC)
The Federal Competition and Consumer Protection Commission (FCCPC) requires digital money lenders to register with it before the commencement of business operations pursuant to its Digital, Electronic, Online, or Non-Traditional (DEON) Consumer Lending Regulations, 2025. This registration allows the company to operate legally as a digital money lending business in Nigeria without which the company would expose itself to sanctions including the permanent blacklisting of the digital money lender and removal of the money lending app from Google Play Store and Apple Store.
To register and be approved as a digital money lending business with FCCPC, the company must meet and provide the following required documents / information to FCCPC:
- Registration as a Data Controller / Processor with the Nigerian Data Protection Commission (NDPC) and obtaining the Audit Trust Mark upon completion of a Compliance Audit. Read our previous article on How to Register as a Data Controller or Data Processor with the Nigeria Data Protection Commission
- Evidence of incorporation of a local company
- State-issued money lenders license
- Detailed list and profile of members of the Board of Directors
- Company’s terms of use, privacy policy and code of conduct
- Evidence of feedback and complaint resolution mechanism
- Duly completed declaration form
- Duly completed FCCPC digital lender’s registration form
Upon receiving the documents listed above, the FCCPC reviews the application, register and issue approval to the company to operate as an approved digital money lending business in Nigeria. FCCPC also publish the details of the company on its database of approved digital lending business as an approved entity in Nigeria.
Conclusion
A digital money lending business can be established and carried on in Nigeria by local and international investors. However, compliance with legal and regulatory requirements is mandatory. A local company must be incorporated with the Corporate Affairs Commission satisfying the minimum share capital and directorship requirements. The company must therefore apply to the appropriate state regulator(s), in the case of Lagos State, the Lagos State Ministry of Home Affairs, for the issuance of a money lenders license which allows the company to legally operate and carry on a money lending business in Lagos State.
Upon obtaining a money lenders license from the appropriate state regulator, the company is required to apply for registration and approval from the Federal Competition and Consumer Protection Commission (FCCPC) to legally operate as a digital money lending business in Nigeria.
