For years, Nigeria’s digital lending industry thrived in the shadows.
It delivered quick cash, but it also earned notoriety for sharp practices.
Borrowers complained loudly about exorbitant rates, and some repaid nearly three times what they originally borrowed.
FCCPC Steps In
Consequently, those complaints pushed regulators to act.
In 2025, the Federal Competition and Consumer Protection Commission (FCCPC) introduced the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations.
With these rules, the Commission announced it would monitor interest rates and stop lenders from exploiting consumers.
Consumers welcomed the move as long-overdue relief.
However, lenders pushed back quickly.
Lenders Push Back
“The interest rate depends on credit risk, market risk, and cost of funds,” argued president of the Money Lenders Association, Gbemi Adelekan.
“Unless the authorities provide us with cheaper funds, I don’t see how this works.”
His criticism reflected the realities of the sector.
Unlike banks, digital lenders do not hold deposits.
Instead, they borrow money from financial institutions and extend credit to people without steady incomes.
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That dependence drives their rates higher than traditional loans.
Even so, Adelekan praised some aspects of the regulation.
He pointed out that the ban on loan apps accessing contacts, pictures, and personal files would end harassment and public shaming.
“It’s a good step.
The rule will force more lenders to use the credit bureau and increase transparency,” he said.
Industry At A Crossroads
Beyond privacy protection, the FCCPC also required lenders to state loan terms clearly, including tenor, interest rates, and repayment schedules.
Moreover, the Commission introduced tough penalties: individuals who break the rules now face fines of up to ₦50 million, while companies risk ₦100 million or one per cent of turnover, whichever is higher.
Meanwhile, the rules arrived at a critical moment.
Over the past decade, digital lending grew rapidly and filled gaps left by banks.
By May 2025, the FCCPC registered 425 loan apps after earlier reforms in 2022.
Yet borrowers continued to report hidden charges, harassment, and unethical recovery methods.
Now, the FCCPC aims to hold lenders accountable.
Consumers cheer tighter oversight, but lenders warn that overregulation could stifle innovation and exclude high-risk borrowers.
Ultimately, digital lending has evolved into a central pillar of Nigeria’s financial system.
And with these new rules, the FCCPC has taken control of its future.
