Borrowers Get More Protection As FG Announces New Rules for Loan Apps, Telcos, Retailers
- The FCCPC has introduced a new law that will provide protection of Nigerians when taking loans either cash or airtime
- The new guidelines apply to digital lenders, fintechs, mobile money operators, telecoms, retailers, and any business offering credit
- With the new regulation, Nigerians accessing loans through digital platforms are set to receive stronger legal protection
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Federal Competition and Consumer Protection Commission (FCCPC) has introduced a new guideline that will provide legal protection for Nigerians who access loans, other lending service digitally.
The new rules is contained in the newly enacted the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025.
The law seek to address rising concerns like predatory lending and data privacy breaches in the digital credit market.
Source: Getty Images
New lending rules in Nigeria
The regulations impose mandatory registration, transparency, and ethical practices on all lending service providers, including partnerships and ancillary services, while ensuring compliance with competition and consumer protection laws.
The rules apply to a wide range of operators, including loan apps, fintechs, mobile money operators, agricultural platforms extending inputs on credit, retailers offering instalments, and even telecommunications companies providing airtime and data advances.
Foreign-based apps targeting Nigerians are also covered.
So not only cash loans, but also credit extended in the form of airtime, mobile data, cashback, services, or barter, so long as such transactions involve a specific or verifiable monetary value falls under the new rule.
What the new rules protecting borrowers
- Based on the new rules, Lenders must fully disclose all terms of service to consumers, including interest rates, repayment conditions, and applicable charges. These terms may only be altered if expressly allowed in the lending agreement.
- All advertisements must be accurate, clear, and easy to understand, free from offensive, misleading, or deceptive content.
- Consumers must be treated fairly and equitably at every stage of engagement.
- Lending agreements must not contain unfair terms that create an imbalance of rights or cause direct or indirect harm to consumers.
- Business must be conducted responsibly, professionally, and ethically at all times.
- Consumers must be promptly informed of any changes in circumstances that could affect their service terms.
- Credit advances must only be provided on an opt-in basis.
- Lenders are barred from accessing borrowers’ contact lists, call logs, and photos practices that had sparked outrage after some platforms used them to shame defaulters.
Source: Getty Images
- Complaints must now be resolved within 24 to 48 hours, and customers can escalate disputes directly to the FCCPC.
- There is also ban on harassment and shaming of borrowers; requires use of credit bureaus instead of invasive methods as stipulated in CBN Guidelines on Digital Lending, 2022
Penalties for lenders
Lenders that breach the new regulations face tough penalties. Individuals could be fined up to N50 million, while companies risk fines of up to N100 million or 1% of their annual turnover, whichever is greater.
Sanctions may also target company executives, with directors facing potential bans from holding board positions for as long as five years.
Beyond consumer protection, the rules require lenders to conduct proper credit assessments to ensure borrowers can repay loans responsibly.
In severe violations, the FCCPC reserves the power to revoke a lender’s licence, suspend operations, or delist the institution entirely.
Federal government approves over 100 new loan apps
Earlier, Legit.ng reporetd that the federal government, through the Federal Competition and Consumer Protection Commission (FCCPC), has approved over 100 new loan applications in the past 12 months.
FCCPC website showed that there are a total of 322 fully approved loan apps in Nigeria as of Wednesday, February 19, while those with conditional approvals were 42.
The commission has also removed about 47 loan applications from its listings, and 16 were given outright approval by the CBN
Source: Legit.ng
