The Federal Competition and Consumer Protection Commission (FCCPC) has officially commenced the implementation of the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations (DEON Consumer Lending Regulation), 2025, marking a decisive move to curb widespread malpractice in Nigeria’s fast-growing digital lending space.
Addressing Consumer Exploitation
For years, Nigerians have raised concerns over exploitative practices by some loan app operators. Complaints have ranged from harassment, unethical loan recovery methods, defamation, and data privacy violations to anti-competitive behaviour within the sector. The new regulation, announced in Abuja by the FCCPC’s Executive Vice Chairman/Chief Executive Officer, Mr. Tunji Bello, seeks to address these issues head-on by providing a comprehensive legal framework that safeguards consumer rights.
“These regulations draw a clear line that innovation is welcome, but not at the expense of the rights and dignity of consumers or the rule of law,” Bello said. He added that the rules would ensure transparency, fairness, responsible conduct, and accessible redress mechanisms, protecting borrowers from predatory practices.
Key Provisions of the Regulation
The DEON Regulation, made pursuant to Sections 17, 18, and 163 of the Federal Competition and Consumer Protection Act (2018), introduces wide-ranging requirements for all digital and non-traditional lenders in Nigeria. Among its highlights:
- Mandatory Registration: All digital lenders, including Mobile Money Operators (MMOs) and Digital Money Lenders (DMLs), must register with the FCCPC within 90 days of commencement.
- Sanctions for Non-Compliance: Violators face penalties of up to ₦100 million or 1% of annual turnover, in addition to the potential disqualification of directors for up to five years.
- Consumer Protection Measures: The rules prohibit pre-authorised or automatic lending, ban unethical marketing, and compel lenders to provide clear and accessible loan terms.
- Data Privacy and Ethical Recovery: Lenders must comply with strict data privacy standards and refrain from harassing or defaming borrowers during loan recovery.
- Market Fairness: All lender partnerships must register jointly, while monopolistic or dominance-based agreements require prior approval from the FCCPC.
- Local Ownership Requirement: For airtime and data lending services, at least one service provider in the partnership must be locally owned.
Promoting Responsible Digital Finance
According to Ondaje Ijagwu, FCCPC’s Director of Corporate Affairs, the regulation is designed to tackle not only abusive practices but also to promote a fair digital credit ecosystem that strengthens financial inclusion. The FCCPC emphasizes that innovation in digital finance must evolve responsibly, with consumer dignity and data privacy at its core.
The Commission has urged Nigerians to report unlawful lenders, unfair interest rates, or privacy violations through its complaint portal (lenderstaskforce@fccpc.gov.ng).
Industry Implications
Nigeria’s digital credit sector has expanded rapidly over the past five years, with millions of citizens relying on mobile loan apps for quick access to credit. However, the sector’s growth has come with risks, particularly around unregulated interest rates and abusive recovery practices.
By establishing the DEON Regulation, the FCCPC is not only monitoring interest rates but also reinforcing consumer confidence in the industry. Analysts view this as a turning point that could encourage responsible players while forcing rogue operators out of the market.
Looking Ahead
The regulations, effective July 21, 2025, represent a critical milestone in Nigeria’s financial regulatory landscape. As Bello explained, “No consumer should be harassed, defamed, or lured into unsustainable debt under the guise of digital lending.”
With strong enforcement and cooperation from lenders, the DEON framework has the potential to transform Nigeria’s digital lending industry into a more transparent, ethical, and consumer-friendly space—one that supports innovation while protecting millions of borrowers nationwide.
