On 2nd of August, 2023, the Federal Competition & Consumer Protection Commission (“FCCPC”) issued a new directive that all previously approved digital money lenders in Nigeria must revalidate the information they submitted to the FCCPC. The foregoing means that existing loan companies in Nigeria must re-register their loan Apps with the FCCPC otherwise they will be penalized, their Apps will be deactivated and deleted them from Playstore and all payment gateway companies in Nigeria, on the order of the FCCPC, will block the affected loan Apps from processing payments to customers.
Registration with the FCCPC or revalidation of loan Apps is mandatory. The registration with the FCCPC free where a loan company is seeking to operate using one loan App though professional fees may apply for drafting the relevant policies and supporting documents and processing the FCCPC approval may apply. However, additional loan App attracts registration fee usually based on assessment of the FCCPC but not exceeding N500,000 (Five Hundred Thousand Naira) per loan App. Please note that a loan company can only register a maximum of five (5) digital loan Apps in Nigeria. Where a business seeks to have more than five (5) loan Apps, then it must incorporate a separate company for the additional loan Apps, subject, of course, to a maximum of five (5) loan Apps.
The FCCPC has noted recently that some loan Apps are operating on the Google Playstore without regulatory approval in violation of the FCCPC Guidelines for Digital Lenders in Nigeria. According to the FCCPC, some digital lenders resort to the use of Android Package Kits (APK) file format to reach customers outside the Google Playstore. Therefore, the FCCPC gave a 5-day ultimatum to those unregistered loan companies using APK format or similar formats to register immediately with the FCCPC and provide evidence that the such APK or other format operations are in compliance with the Nigerian laws. The deadline for compliance has now passed and the defaulting businesses risk serious sanctions including office raids, arrest and prosecution of staff and directors.
It is useful to mention that whilst the resort to the use of APK file formats or any other digital formats for money lending may not have been expressly prohibited in Nigeria, those behind any form of digital lending business in the country, using whatever digital medium, must be incorporated by the Corporate Affairs Commission, obtain the relevant money lender licence from the appropriate authorities and register with the FCCPC as required by the extant FCCPC Guidelines for digital lenders. Failure to comply with the Digital Money Lenders Guidelines of the FCCPC is a violation of Nigerian law, which renders any business activity of such defaulting loan company illegal.
YOU CAN READ MORE ABOUT REGISTRATION OF DIGITAL LENDERS WITH THE FCCPC BELOW:
