The landscape of Nigeria's digital lending market has undergone a significant shift as the Federal Competition and Consumer Protection Commission (FCCPC) intensifies its regulatory grip. This follows the expiration of the crucial January 5, 2026, deadline for compliance with the Digital, Electronic, Online and Non-Traditional Consumer Lending Regulations, 2025.
Registration Numbers and the Watchlist
According to the latest data from the Commission, a total of 521 digital lending companies are now under its regulatory oversight. Out of these, 457 have secured full operational approval, while 35 others are operating with conditional approval. An additional 29 lenders, originally licensed by the Central Bank of Nigeria (CBN), also fall under the FCCPC's new supervisory framework.
However, the regulatory crackdown has identified a significant number of non-compliant operators. The FCCPC has placed 103 loan applications run by unregistered companies on a watchlist, signaling imminent enforcement actions. The Commission has repeatedly warned that lenders operating outside its approval system risk severe penalties, including delisting from app stores, substantial fines, and potential criminal prosecution.
Industry Backing and Capacity Concerns
While the new framework is widely seen as a necessary step to curb harassment and unethical practices, it raises questions about the regulator's capacity. Analysts and industry insiders have expressed concern that supervising over 500 registered lenders, alongside hundreds of illegal operators, could severely strain the FCCPC's resources.
Gbemi Adelekan, President of the Money Lenders Association (MLA), acknowledged the challenge. He noted that the sheer volume of players could make enforcement overwhelming. Adelekan pointed out that the regulations' scope is broad, now encompassing the IT platforms that support digital lenders. Despite the challenges, he described the FCCPC as increasingly responsive to industry feedback, stating, "They've been engaging with us actively. The real test will come as more disputes and compliance issues arise."
Key Rules and Enforcement Sanctions
The 2025 regulations establish a comprehensive legal framework designed to bring order to Nigeria's digital credit space. Key provisions mandate:
- Clear and upfront loan disclosure terms.
- Strict data privacy protections for borrowers.
- Ethical debt recovery practices, banning harassment and defamation.
- Fair interest rates and a prohibition on automatic or pre-authorised lending.
- Restrictions on apps accessing borrowers' contact lists, photos, or transaction data.
Enforcement actions commenced immediately after the January 5 deadline. Non-compliant lenders now face fines of up to N100 million or 19% of their annual turnover. Directors of such companies also risk disqualification from holding office for up to five years.
Adelekan observed a positive early impact, noting a reduction in borrower complaints since the rules were introduced, suggesting a return of some sanity to the sector. However, he cautioned that abuses persist, including cases of borrowers taking loans from dozens of different platforms with no intention to repay.
This new framework builds upon the 2022 interim guidelines, which struggled to fully address borrower harassment. With stronger sanctions and wider coverage, regulators are hopeful that the 2025 regulations will finally instill lasting order and protect Nigerian consumers in the dynamic digital lending market.
