FCCPC Digital Lending Regulations Curb Predatory Apps

Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) rolled out the FCCPC digital lending regulations to clean up the country’s loan app market. For years, borrowers have complained about harassment, hidden fees, and sky-high interest rates. Now, the regulator is stepping in to set new rules, promising stronger consumer protection and forcing digital lenders to play fair.

For millions of Nigerians who have complained of harassment, hidden charges, and predatory interest rates from loan apps, this marks a turning point. For fintechs, telcos, and other businesses offering digital credit, it means higher compliance costs and the end of a free-for-all.

Nigeria’s digital lending space has grown rapidly in the last five years, fuelled by smartphone adoption, fintech innovation, and rising consumer demand for quick credit. But alongside this growth came serious abuses:

• Predatory interest rates that trap borrowers in debt cycles.
• Harassment and “shaming tactics” like sending threatening messages to borrowers’ contacts.
• Opaque fees and loan terms hidden in fine print.
• Misuse of personal data, including unauthorised access to phone books.
  

The FCCPC says these practices have not only hurt consumers but also damaged trust in Nigeria’s fintech sector. The new regulations aim to restore confidence, protect consumers, and foster fair competition.

Key Highlights of the New Regulations

1. Mandatory Registration and Approval

Every digital lender, mobile money operator, or business offering consumer credit must now register and secure approval from the FCCPC before operating. This requirement applies to anyone benefiting from lending activities, whether through cash loans, airtime/data credit, BNPL (buy-now-pay-later), or barter transactions.

• Application fee: ₦100,000
• Approval fee: ₦1,000,000 (covers two apps, ₦500,000 for each extra app, max five apps)
• Renewal: Every 36 months, with ₦500,000 annual levy

Existing operators have 90 days from July 25, 2025, to re-register or risk suspension.

2. Transparency and Fairness

Lenders must now:

• Clearly disclose interest rates, repayment terms, and all fees upfront, in plain English.
• Avoid hidden charges or unfair contract terms that strip away consumer rights.
• Approve loans only for borrowers who show repayment ability.

3. Ban on Harassment and Coercion

The days of public shaming, harassment, or debt collection through borrowers’ contacts are over. Recovery practices must comply with ethical standards, and deceptive advertising is strictly prohibited.

4. Partnership Oversight

Any joint venture, vendor agreement, or fee-sharing deal linked to lending must now be submitted for FCCPC approval. For telcos and digital service providers offering airtime/data loans, at least two intermediaries must be used, and one must be fully Nigerian-owned.

5. Interest Rate Monitoring

While the FCCPC hasn’t set a fixed rate, it now has the power to monitor and clamp down on exploitative pricing. This is aimed at curbing the sky-high rates often charged by loan apps.

6. Data Privacy and Security

Lenders must comply with the Nigeria Data Protection Act, 2023, including:

• Informed borrower consent for data use.
• Privacy Impact Assessments and Compliance Audit Reports are subject to review by both FCCPC and the Nigeria Data Protection Commission (NDPC).
• Ban the unauthorised use of borrower data for collections.

7. Strict Reporting and Record-Keeping

Operators must submit:

• Bi-annual reports on loan volumes, values, interest, and complaints.
• Annual returns (due by 31 March), including audited financials.

Records must be kept for at least five years and made available to the FCCPC within 48 hours on demand.

8. Severe Penalties for Non-Compliance

• Companies: Up to ₦100 million fine or 1% of turnover (whichever is higher).
• Individuals: Up to ₦50 million fine.
• Directors: Up to five years’ disqualification from holding board positions.
• Operational sanctions: Suspension, delisting, or revocation of approvals.
  

For startups and established players alike, compliance is no longer optional. Businesses must:

• Assess whether they fall under the FCCPC’s “benefit test.”
• Re-register within the 90-day window.
• Review all contracts, vendor agreements, and customer policies.
• Strengthen data protection systems.
• Budget for ongoing compliance costs.

This shifts digital lending from a loosely regulated grey area to a formally supervised financial sector. While costs may rise, the rules are expected to clean up the space and create a level playing field.

For consumers: These rules mean more transparency, less harassment, and safer lending practices. Borrowers can check the FCCPC’s list of approved lenders to avoid scams.

For fintech founders and investors: Compliance will be tougher and more expensive, but long-term trust in the market should improve. The FCCPC’s actions signal that Nigeria wants to regulate fintech like mainstream finance, not as a fringe sector.

For the economy: By enforcing ethical practices, the FCCPC hopes to expand financial inclusion while curbing abuses that could destabilise the lending ecosystem.

Nigeria’s $2.1 billion consumer lending industry is entering a new era. The FCCPC’s 2025 regulations move the sector from reactive enforcement (like app bans) to a structured compliance model, similar to what countries like Kenya have implemented.

The message is clear: digital lenders can no longer cut corners. Ethical conduct, transparent contracts, and data security are now the cost of doing business.

For consumers long harassed by loan apps, that’s welcome news. For operators, it’s a compliance reality they can’t afford to ignore.