10 key points on Nigeria’s new FCCPC digital lending regulations

Nigeria’s financial landscape has a fresh regulation from the Federal Competition and Consumer Protection Commission (FCCPC) called the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025, effective July 25, 2025.

The digital lending market is valued at $2.1 billion and serves millions. So, amid rising defaults and economic pressures, these rules aim to tame predatory practices while boosting accountability.

We, at Technext, did a guide in 10 simple points, covering what the regulation entails, key stats like the 399 fully approved lenders as of July 2025, up from 119 in April 2023, reflecting a 235% surge in fully approved digital lenders, with total approvals (including conditional) reaching around 425, and why Nigerians (from everyday borrowers facing high-interest traps to lenders navigating compliance costs) need to watch closely.

This could mean safer loans but potentially higher fees in a sector where personal loans dropped 37.4% to ₦2.39 trillion by January 2025.

1. Who and what the FCCPC lending regulation covers

The regulations target all digital, online, or non-traditional consumer loans, including unsecured cash, airtime credit (e.g., MTN’s MoMo generating ₦83.19 billion in fintech revenue in H1 2025), data loans, cashback, and barter schemes.

This encompasses fintech entities, mobile money operators like Airtel SmartCash, agrotech platforms, and cross-state vendors, even state-licensed ones if they operate nationally.

Retail loans surged 92.2% to ₦1.73 trillion by January 2025, so this protects vulnerable borrowers from exploitative add-ons in everyday services, but could limit options if smaller players exit.

2. Mandatory registration

All lenders and partners must register with the FCCPC, submitting a Compliance Audit Report, Data Protection Impact Assessment, audited finances, and ethical proofs. Microfinance banks are exempt with a waiver, but the rest, including 399 fully approved and 40 conditionally approved lenders, have 90 days (until October 23, 2025) to comply. Stats reveal 47 apps delisted and 88 on watchlists for violations, highlighting cleanup efforts.

Why pay attention? In a market where approvals jumped 40.2% by July 2025, this weeds out scams, but borrowers might see fewer apps, while lenders face barriers that could hike service costs.

3. Fees and approval process

Application fee: ₦100,000; approval up to ₦1 million for mobile operators (covering two apps; ₦500,000 extra per additional, max five); annual levy ₦500,000. Approvals last three years, renewing every 36 months by March 31 post-expiry, with FCCPC reviews taking at least 30 days.

Data indicates these costs add to a sector where startups like Regxta have disbursed ₦7 billion since 2018 (₦3 billion since late 2023), but compliance could strain smaller firms.

For Nigerians, this means potentially pricier loans in a growing market expected to expand through 2031, but it ensures only solvent players operate, reducing default risks flagged by the IMF.

4. Partnership rules: No deals without FCCPC nod

Lenders must get FCCPC approval for partnerships, submitting contracts detailing risks, data protection, and disputes, even existing ones.

This impacts telecom-fintech tie-ups, like airtime lending, contributing to MTN’s massive revenue. 22 lenders currently hold direct CBN licences, so oversight aims to curb abusive alliances.

This matters because exploitative partnerships have led to harassment; Nigerians borrowing via apps could see slower rollouts but fairer terms, especially as the sector matures beyond “side hustle” status.

5. Fair play mandated

Transparency on fees and terms is required; no unsolicited ads or loans to unrepayable borrowers; fair debt recovery bans harassment.

Interest rates are monitored to prevent gouging, aligning with laws like the Nigerian Data Protection Act 2023. Evidence shows aggressive tactics caused psychological distress and data sales exposing borrowers to fraud, amid high defaults in NBFIs.

Nigerians, take note: In a market where banks allocate only 8% of a $27 billion loan portfolio to consumers, these rules could ease debt cycles, but watch for lenders passing audit costs to you.

6. Your info stays safe

Compliance with data laws is mandatory, including DPIAs; no unauthorised contact access or sales. This addresses violations where lenders sold data, leading to spam and fraud. With online lending booming post-2017 (accelerated by COVID), privacy breaches have been rampant.

Why this is key for Nigerians: Digital credit fills gaps for SMEs (55% turning to it globally in 2025), so protecting data prevents exploitation, fostering trust in a $2.7 billion TAM market.

7. Compliance reporting

Biannual reports, annual returns, 48-hour record production, and audits are required, with notifications for business changes. This builds on 2022 guidelines that boosted approvals from 119 to 399 fully approved lenders. Data highlights FCCPC’s crackdown, delisting 47 apps for ethics breaches.

Pay attention, Nigerians: Stricter oversight could stabilise a volatile sector with falling personal loans (down 26.7% to ₦2.39 trillion by December 2024), but non-compliant apps might disrupt quick access during economic crunches.

8. Penalties

Companies: up to ₦100 million or 1% turnover; individuals: ₦50 million; directors: up to five-year bans; plus suspensions or revocations. This enforces against practices like dishonest ads and threats, which have caused borrower distress.

For Nigerians, tough penalties in a market with high NPL risks could deter bad actors, but might consolidate power among big players like telecoms, limiting competition and innovation.

9. Data sharing for better credit

Lenders and telecoms must share data with credit bureaus, aiding profiles for airtime borrowers. Strategies like AI voice analysis and NIN linking are tackling defaults, where slowing loan delivery by 10-20 hours cuts defaults by 21%.

CBN surveys note rising defaults in Q2 2025, so this promotes inclusion.

Better data means easier future loans, but only for responsible users, and this is vital in an economy where consumer lending is just 8% of banks’ portfolios.

10. A shift to safer lending

Overlapping with CBN rules, these regulations add burdens like double DPIAs but signal maturity in a $2.1 billion industry growing globally to USD 39.8 billion by 2033.

Industry voices like Money Lenders Association’s Gbemi Adelekan warn of cost impacts on pricing, while Lendsqr’s Adedeji Olowe calls it a “financial system” evolution.

Ultimately, Nigerians need to know that amid IMF-flagged default risks and a 40% lender surge, this fosters fairness but could raise barriers, protecting against traps while pushing for responsible borrowing in tough times.