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Nigeria’s digital lending sector is set for a major shake-up as the Federal Competition and Consumer Protection Commission (FCCPC) rolls out new regulations designed to strengthen borrower protections and bring greater transparency to the market.
Under the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025, lenders must now clearly disclose loan terms—including rates and conditions—before transactions are finalized. Loan agreements must also be communicated in plain language to ensure consumers fully understand their obligations.
The new framework introduces strict penalties for violations. Individuals risk fines of up to ₦50 million, while corporate offenders face as much as ₦100 million or 1% of annual turnover, whichever is higher. Company directors could also face disqualification from holding board positions for up to five years.
To address long-standing consumer complaints, lenders are now required to resolve disputes within 24 hours (48 hours for complex cases). Unresolved issues can be escalated directly to the FCCPC, pushing lenders to strengthen customer service capacity. The Commission also reserves the right to suspend, revoke, or delist licenses in cases of severe non-compliance.
A key provision limits the use of invasive personal data. Digital lenders are now barred from accessing borrowers’ contact lists, photos, and call logs—data often exploited for debt collection and shaming tactics. Industry experts, including Adedeji Olowe, CEO of Lendsqr, note this could accelerate reliance on credit bureaus, fostering a more formal and transparent credit reporting culture.
The scope of the rules extends beyond fintechs to include telecommunications companies, which offer airtime and data lending services. Telcos must now partner with at least two providers, one of which must be locally owned, to promote competition and fairer market practices.
However, the FCCPC’s intention to monitor and potentially cap interest rates has sparked debate. Critics argue that without alignment with monetary authorities, such interventions could distort market dynamics and discourage lending, ultimately restricting credit access for consumers.
Despite these concerns, regulators insist the reforms are crucial to sanitising Nigeria’s consumer lending ecosystem, curbing exploitative practices, and fostering trust in digital financial services.
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