In a significant move to regulate Nigeria’s burgeoning digital lending market, the Federal Competition and Consumer Protection Commission (FCCPC) has introduced the 2025 Electronic, Online, or Non-Traditional Consumer Lending Regulations.
Effective from July 21, 2025, these new rules are aimed at ensuring accountability, transparency, and consumer protection within the fast-growing digital money lending sector.
The regulations require all digital lenders—from fintech companies to mobile money operators—to register with the FCCPC within 90 days.
Non-compliance attracts severe penalties, including fines of up to N100 million or 1% of annual turnover, whichever is higher, with individual officers potentially facing disqualification from directorship roles for up to five years.
These stringent measures reflect the government’s resolve to clean up a sector that has seen numerous abuses including exploitative interest rates, hidden fees, aggressive debt collection practices, and violations of borrowers’ data privacy.
Besides registration, the regulations mandate that all loan agreements be disclosed in a simple, transparent manner.
Digital lenders must clearly state interest rates, fees, repayment schedules, and other critical terms, ensuring borrowers fully understand their obligations before proceeding.
The rules also prohibit unsolicited marketing and coercive recovery tactics, while requiring lenders to carry out adequate creditworthiness assessments prior to loan approval.
A notable aspect of the regulations is the strengthened data protection requirements, which compel lenders to comply with Nigeria’s Data Protection Act 2023.
This means explicit consumer consent is needed before collecting or sharing personal data, with robust cybersecurity measures mandatory to guard against breaches.
The regulations even restrict digital lenders from accessing sensitive personal data like call logs and contact lists, practices previously tied to aggressive digital lending behavior.
Competition safeguards are embedded in the framework to prevent monopolistic practices, especially in airtime and data lending where partnerships must include at least one locally owned company.
Lenders must also file annual and bi-annual compliance reports, allowing the FCCPC to closely monitor market conduct.
These regulations not only unify the fragmented legal landscape previously governing digital lending but also level the playing field between traditional banks and emerging digital lenders.
By imposing higher consumer protection and compliance standards, they promise a fairer, safer financial environment for millions of Nigerians relying on digital credit for their economic needs.
The FCCPC has encouraged consumers to report any breaches and has committed to cracking down on non-compliant operators to promote a healthier lending ecosystem.
Industry experts believe that this comprehensive regulatory regime will ultimately weed out rogue actors and foster trust in digital financial services.
This landmark regulation marks a pivotal moment in Nigerian fintech, balancing innovation with responsible lending, and protecting vulnerable consumers from predatory practices while supporting sustainable financial inclusion.
