Digital Lending in Nigeria - FCCPC Guidelines

Digital lending in Nigeria FCCPC Guidelines. There’s no doubt that the world has gone digital. There has been a notable quantum leap in the advancement of technology.

Digital lending in Nigeria has become the norm of the 21st century, but most people don’t know what digital lending is, why it is important, or why you should be involved in it. In this article, we will discuss extensively what digital lending is.

The most important aspect of this article will be our discussion of what the FCCPC guidelines are and how it affects digital lending in Nigeria. Stay tuned and pay close attention.

Digital Lending in Nigeria

Imagine you’re stranded, and you need an urgent loan to seek out yourself or your family.

Imagine you need a fast loan but don’t have the collateral to take this loan from the bank; what would you have done in these situations?

Digital lending, as we know, is an online platform that allows individuals from any part of Nigeria to access loans at will, provided they have a very low credit score history.

These platforms give you the needed access to loans at any given time. It would be using an alternative source of data that is different from the bank’s BVN.

These alternative sources of data can include your phone number, your social media handles, or any other necessary means of data identification other than your Bank Verification Number. These data sources aim to check your creditworthiness before any loan can be offered.

Creditworthiness is a means of checking if you’re eligible for a loan before any loan is offered to you by these digital platforms. They will first check if you own any baking or loan borrowing platforms. If you’re not, then they can loan you without collateral.

The Rise Of Digital Lending In Nigeria

There has been a tremendous rise in digital lending in Nigeria. This has provided more opportunities for customers as well as business owners.

Those who need to obtain loans don’t need to go through the rigorous process and paperwork, and you can easily apply for and get a loan almost instantly. This is how far digital lending has gone.

Another important factor that has led to the complete acceptance of digital lending in Africa is that you do not need collateral to apply for this lean.

It has equally made money lending easier, and it is no longer the sole responsibility of banks alone. Bank and cooperating individuals can come together and create a digital platform that offers loans to individuals.

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Impact and Benefits Of Digital Lending In Nigeria

The rise in digital lending in Nigeria has helped many businesses to start again, and it has helped many people to start their desired businesses, and also reduced the rate of poverty in the country.

As of 2019, studies show more than 55 million mobile money transactions. As the year goes by, the number increases exponentially as digital lending becomes accepted among many Nigerians.

Unlike most other native banking systems of loan taking, the digital lending platform has a very low-interest rate compared to our local banks, and this has helped to make digital lending to be more accepted by Nigerians.

Another notable factor is that digital lending is swift and does not require collateral.

In contrast to our local banking system, which requires rigorous paperwork and collateral and is time-consuming. This benefit has helped to make digital lending one of the best-accepted platforms in Nigeria, and it is fast spreading to other parts of the continent.

How Digital Lending Works

Digital lending is very easy to apply for a loan and get approved; with a strong internet connection and data, you can easily use this digital lending platform.

In digital lending, we don’t only take loans from the platform, and we equally do various bank transactions using some of the platforms or applications providing the services.

After you’ve completed the application process, which can be done online, the next thing is for your application to be reviewed by the platform and check the level of your creditworthiness.

After they have checked through these and you are eligible to take a loan from the platform, they will forward all your important documents to the lender, which may be another platform. This is to show how interconnected the digital banking platform has become.

If, after the verification process, you’re eligible for the loan, the loan you applied for will be credited to your account within 24 hours.

It is important to note that the loan application and reviewing system does not take up to 24 hours to be completed, and if approved, you will get your loan.

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The FCCPC is the board that is in charge of digital lending platforms in the country. They regulate the operation of digital lending platforms in Nigeria.

A few months ago, this platform ordered the all-digital lending platform in the country to stop the provision of plans or any bank transaction services to anyone or any cooperation that is under investigation for fraud by the federal government of the country.

In the same way, orders were given to all mobile network services providers, all cell phone and data services to stop providing server hosting to any unlicensed individual or corporation under investigation by the federal government for fraud.

Furthermore, sources have it that the FCCPC few months ahi ordered google Nigeria to take down all digital lending platform that does not comply with the organization’s rules and directive. All digital platforms that are offering services to people who are not eligible to take a loan from the platform were all shut down by the directive of this board.

In addition, all digital lending platforms that do not have an app on the Google play store were taken down, and this is to help curb the rising fraud in the banking sector.

A directive was issued to all banks and all technology and service providers to get evidence of approval by the country’s finance sector before offering loan services to people or businesses.


According to the above-written directives by this platform, guidelines were formulated and accepted by the Joint Regulatory and Enforcement Task Force as a method of helping the digital lending platform to establish a clear regulatory framework that will help to guide the digital lending space.

  • The first and foremost guidelines require all digital lenders and platforms across the country to register with the FCCPC, and in addition, the platform must complete and submit two forms.
  • The names of the two forms that there required to fill out are;
    • DLG 001 and
    • DLG 002.
  • The DLG 001 registration insists that all digital lending platforms must provide operational information and forward it to the FCCPC for verification. While the second form contains a declaration by the FCCPC relating to the following;
  • Legitimacy is a declaration of how legitimate your business venture is and how well it complies with the board’s requirements.
  • Lawful source of funds and conformity with anti-money theft, and finally.
  • Data protection laws; states that individual data and personal information must not be shared with a third party.

Regulatory Framework For Digital Lending

Four major types of platforms are involved in digital lending in Nigeria and across Africa; they are

  • Money lending entities
  • Deposit money banks
  • Finance companies
  • Money lending entities


There are numerous authorizations of power vested in the FCCPC; some of them are

  • Protect, promote and safeguard consumer interests
  • Acts to reduce the overall increase and risk that may occur in the banking sector and consumption of certain products and services from the masses.
  • Ensure that customer interest, and well-being receives full consideration and make the top priority of any digital banking sector.
  • This platform provides a medium to reduce the prevalent wrong practices by digital platforms for exploiting individuals by corporate nodes or firms.
  • The Federal Competition and Consumer Protection Act is authorized to make laws and issue guidelines that will help to protect consumer interests anywhere within the nation’s borders.

How To Start A Digital Lending Business In Nigeria.

To start a digital lending business legally in Nigeria, as an individual or organization, you must first obtain your license, known as the Money Lenders license, which is issued by the state in Nigeria (Abuja).

In Nigeria, starting a digital money lending business without a license from the authority is a punishable offense. Below are the  requirements needed to process the money lender license;

Requirement for Obtaining a Money Lenders License in Abuja

  • Application letter using the letter headed paper of the company addressed to the Chief Magistrate on a Letterhead paper with the company seal affixed to the letter.
  • Memorandum and Articles of Association of the company.
  • Certificate of Incorporation;
  • Good means of identification of the directors (photocopies).
  • Tax Clearance of the Individual or Corporate Body obtained from Federal Inland Revenue Service (FIRS), and if it’s a new company – provide proof of tax registration;
  • Police Clearance of the applying individual/ Corporate body showing the thumb printing of one of the company directors. In Abuja, it is obtained from Zonal Intelligence Bureau, The Nigeria Police, Zone 7 Headquarters, Abuja.
  • Evidence of Maintenance of current account under a licensed Bank/ Reference letter from the company’s bank.

Once the above requirements are met, the applicant will be issued a Money Lenders License, which shall be valid for one (1) year and subject to annual renewal.


We have come to the end of this article. As we stated earlier, digital lending has taken a quantum leap in Nigeria, and everyone, despite age, deserves to be knowledgeable about it.

We also extensively discussed FCCPC guidelines and directives while wrapping up how to start a digital lending business. We are confident that this article was helpful. Share your thoughts in the comments section.