Nigeria’s digital lenders have expressed concern over new rules from the Federal Competition and Consumer Protection Commission (FCCPC) that seek to monitor and regulate interest rates charged by loan apps.
The FCCPC, responding to mounting complaints from Nigerians about excessive charges, announced through its 2025 Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations that it would now track rates to ensure they are fair.
“The Commission shall periodically monitor interest rates for services of consumer lending, and ensure rates are not exploitative and inimical to consumer interest. Such monitoring shall be made in compliance with provisions of Guidelines developed pursuant to Section 163 of the Act,” the FCCPC stated.
However, lenders argue that interest rates should be determined by market realities such as risk and the cost of funds.
“This is a difficult area because for us, the interest rate is determined by the credit risk, market risk, and cost of funds. Unless the authorities are planning to give us funds to be able to operate and bring more people into the ecosystem in terms of financial inclusion, I don’t know how this will work,” said Mr. Gbemi Adelekan, President of the Money Lenders Association (MLA).
Borrowers have long complained about steep repayment terms. For instance, one customer was offered N2.5 million but required to repay N268,230 monthly for 24 months—an effective annual interest of nearly 198 per cent.
Adelekan noted that the high charges reflect the risks and operational costs in the industry, particularly since most loan app operators cannot accept deposits and must borrow at higher costs themselves.
Still, he welcomed provisions that prohibit lenders from accessing borrowers’ contact lists, pictures, or transaction records, a practice that has led to harassment and defamation.
“It’s a good step in the right direction for the ecosystem,” he said, adding that the move would encourage wider use of credit bureaus.
Lendsqr founder, Adedeji Olowe, also pointed out that the new rules signal that digital lending is now being treated as a full-fledged financial service.
“Whether you love it or hate it, digital lending isn’t a side hustle anymore. It’s part of the financial system, and it’s going to be treated that way,” he remarked.
The new regulation builds on the 2022 interim framework that required all loan apps to register with the FCCPC. As of May 2025, 425 digital lenders had been licensed.
Despite this, harassment of borrowers remains widespread, prompting the FCCPC to outline stiff penalties for violators. Offenders may face fines of up to N50 million for individuals, and up to N100 million or 1% of turnover for companies. Sanctions could also include suspension, deregistration, or app removal from platforms such as Google Play Store.
