Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) has taken a decisive step to rein in the country’s fast-growing digital lending sector, issuing a directive that all online lenders must fully comply with the Digital, Electronic, Online and Non-Traditional Consumer Lending Regulations, 2025 by January 5, 2026.
The announcement marks one of the strongest regulatory interventions in Nigeria’s digital credit space, which has expanded rapidly in the last five years but has also faced intense criticism over unethical lending practices.
A New Framework for a Troubled Sector
The new regulation—effective since July 21, 2025—was introduced under the Federal Competition and Consumer Protection Act (FCCPA) 2018. It aims to enforce fairness, transparency, and accountability across digital lending, an industry notorious for issues ranging from predatory interest rates to data misuse and borrower harassment.
For years, consumers have raised complaints about rogue lenders deploying tactics such as unauthorized account deductions, shaming tactics, data leaks, and harassment through unsolicited third-party messages. These incidents repeatedly triggered public backlash and forced the FCCPC to step in with interim oversight measures.
The 2025 regulatory framework now replaces those stop-gap interventions with a permanent, enforceable system designed to reshape the digital lending landscape.
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New Guidelines for Compliance
Alongside the regulation, the FCCPC has published comprehensive Guidelines on the Digital, Electronic, Online and Non-Traditional Consumer Lending Regulations, 2025.
The guidelines provide additional clarity on documentation, operational standards, and compliance obligations for digital lenders. They also introduce updated versions of Forms 1 and 3, which lenders must now submit as part of their authorization process.
Importantly, existing applicants with pending submissions will not be required to wait for a fresh notice from the Commission. Instead, they may proactively supply all additional information required under the updated guidelines.
FCCPC Executive Vice Chairman Tunji Bello stressed that operators have had ample notice of the new regime.
“Full compliance is not only a legal obligation but a major step towards protecting consumers and building a fair, responsible lending system,” he said. “Operators have had sufficient time to adjust.”
He also noted that the Commission will continue processing pending applications transparently to avoid unnecessary delays.
What Happens After January 2026
The FCCPC has made it clear that enforcement begins immediately after the January 5, 2026 deadline. Lenders that fail to comply risk being barred from operation. The Commission may also direct banks, payment processors, app stores, and other service partners to discontinue relationships with non-compliant lenders.
Other penalties allowed under the FCCPA—including fines and operational restrictions—may also be imposed.
The Commission has made all guidelines, forms, and FAQs available on its website, and urged operators to seek clarification early.
An Industry at a Crossroads
Nigeria’s digital lending space has grown explosively—reaching 425 FCCPC-approved firms by May 2025. This growth has helped millions access instant credit outside the traditional banking system, but it has also amplified risks: skyrocketing interest rates, poor credit assessment, and aggressive loan recovery practices.
The new regulatory regime marks a turning point. As the January deadline approaches, the industry faces a clear mandate: innovate, but do so responsibly—or risk being pushed out of Nigeria’s financial ecosystem.
