{"id":6255,"date":"2023-11-14T09:07:38","date_gmt":"2023-11-14T09:07:38","guid":{"rendered":"https:\/\/koriatlaw.com\/?p=6255"},"modified":"2023-11-14T09:07:38","modified_gmt":"2023-11-14T09:07:38","slug":"registration-of-loan-company-in-nigeria","status":"publish","type":"post","link":"https:\/\/koriatlaw.com\/2026\/2023\/11\/14\/registration-of-loan-company-in-nigeria\/","title":{"rendered":"REGISTRATION OF LOAN COMPANY IN NIGERIA"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

How is a Loan Company regulated in Nigeria?<\/em><\/strong><\/p>\n\n\n\n

A loan company, whether buy-now-pay-later (“BNPL”) or digital lender or cooperative society or whatever the design, is usually regarded as a money lender under a State\u2019s Money Lenders Law in so far as it is providing micro or consumer credit to individual or small businesses. It is noteworthy that a loan company can also be registered in Nigeria as a micro finance bank or finance company under the regulation of the Central Bank of Nigeria (“CBN”). The first category of loan company is regulated by either the Magistrate\u2019s Court or the Ministry of each State i.e. a sub-national government (Nigeria has 36 States and a Federal Capital Territory in Abuja) whilst those licensed and regulated by the CBN are some sort of federal-regulated businesses. <\/p>\n\n\n\n

Regardless of their status of registration or regulation, all loan companies seeking to do digital lending have additional obligation to register with the Federal Competition and Consumers Protection Commission (“FCCPC”)<\/a> before their loan Apps can go live on the Nigerian internet space or be integrated with any payment company or hosted on any App store like Google Playstore. <\/p>\n\n\n\n

The major difference in all of the above three loan companies is that the micro finance bank is the only deposit taking company, others cannot take deposit from the public except through borrowings. Also, micro finance banks and finance companies tend to focus more on credit services for medium and large businesses whilst State-licensed loan companies focus on individuals and small businesses. It is important to add that CBN-licensed companies are very expensive to set up and require stringent licensing requirements and strict operational regulation.<\/p>\n\n\n\n

\nhttps:\/\/koriatlaw.com\/2026\/registration-of-digital-lenders-with-federal-competition-and-consumer-commission-fccpc-in-nigeria\/\n<\/div><\/figure>\n\n\n\n

Is a licence required to provide digital lending services in\nLagos?<\/em><\/strong><\/p>\n\n\n\n

Yes. Every money lender within Lagos State must be licensed by the Lagos State Ministry of Home Affairs and Tourism (\u201cMinistry\u201d) unless it is lending money as a cooperative society which is licensed by Ministry of Trade and Commerce or any of the above CBN-licensed financial institution (e.g. (micro finance bank or finance company) or a statutory body or a licensed pawnbroker. <\/p>\n\n\n\n

Under the Lagos State Money Lenders Law<\/strong>(\u201cLagos State Law\u201d), it is\nan offence to engage in a digital lending business without the required\ngovernment licence and anyone found engaging in any activity of digital\nlending, without with the required licence, will be presumed to be a Money Lender\nand held liable under the law. <\/p>\n\n\n\n

It is important to mention that in\nLagos State, a digital lender is granted both Money Lender Certificate (by a\nChief Magistrate\u2019s Court) and Money Lender Licence (by the Ministry). Both\nmoney lender certificate and licence are usually granted to a corporate\napplicant who meets the requirements.<\/p>\n\n\n\n

What\nis the scope of the Digital Lending Operations<\/em><\/strong>?<\/p>\n\n\n\n

The\nLagos State Law is silent on the scope of the services that a digital lender can\nprovide with the money lender certificate and licence. <\/p>\n\n\n\n

In our view, however, a digital\nlender can loan any amount of money not exceeding the value of its share\ncapital, provided there is nothing in the nature of the transaction that\nviolates any laws and guidelines of the financial institutions regulated by the\nCBN or the Securities and Exchange Commission (“SEC”).<\/p>\n\n\n\n

Can\na digital lending company obtain a money lender licence in one State and use\nsame to operate digitally in other States?<\/em><\/strong><\/p>\n\n\n\n

With\nthe advent of technology, it is possible for the registered address of a money\nlender to be in one State whilst the business is potentially servicing\ncustomers from or residents in different other States of the country through its\ndigital lending applications.<\/p>\n\n\n\n

Please\nnote, however, that a digital lending company requires the money lender\ncertificate and licence of every State in which it seeks to operate either\nphysically or digitally. Failure to obtain the money lender certificate and\nlicence from a particular State where loans are given to customers may create enforcement\nissues and deprive the company the right to seek recovery or enforce a loan\nagreement in the State. <\/p>\n\n\n\n

Also,\nthe promoters of such lending business may be exposed to criminal liability for\ndoing such business without the required licence. It is an offence to engage in\nmoney lending business in a State without the certificate and licence issued by\nthe Government of that State.<\/p>\n\n\n\n

What\nare the requirements for registering a Digital Lending company in Lagos?<\/em><\/strong><\/p>\n\n\n\n

In\nLagos State, an applicant for money lender\u2019s licence must be incorporated by\nthe CAC as a private limited liability company with a share capital of not less\nthan N20 Million and at least two (2) adult directors who must each have three\n(3) years\u2019 tax clearance certificate.<\/p>\n\n\n\n

The\ngeneral requirements for setting up a digital lending business as a private\nlimited liability company in Lagos State are as follows:<\/p>\n\n\n\n

i.\nTwo (2) proposed names for the company for CAC\u2019s name screening and approval;<\/p>\n\n\n\n

ii.\nA proposed registered address, email and phone number of the company in\nNigeria;<\/p>\n\n\n\n

iii.\nNames, resident address, email address, phone number, electronic signature(s)\nand means of identification (preferably data page of international passport) of\nthe shareholder(s), at least two directors and the company secretary; <\/p>\n\n\n\n

iv.\nThe amount of share capital (please note that the minimum share capital of a\nmoney lender company must not be less than N20 million share capital);<\/p>\n\n\n\n

v.\nThe division of the company\u2019s shares amongst the shareholders (if the company\nhas more than one shareholder) and the names of person with significant control\nover the company;<\/p>\n\n\n\n

vi. The description of business\nwhich must be solely for money lending services. However, we have successfully\nregistered and obtained money lender licence for tech companies as a digital\nlending business with additional business objects relating to development of\nmobile applications, technology services and use of lending technologies and\nother software or digital solutions;<\/p>\n\n\n\n

vii.\nA copy of the company’s Memorandum and Articles of Association (\u201cMEMART\u201d). The\nCAC has a generic MEMART for applicants to adopt when incorporating a new\ncompany but we can insert relevant clauses to make it suitable for the money\nlending businesses. <\/p>\n\n\n\n

ix.\nAny other document(s) (such as work permit or business permit, etc. for foreigners\nwho are already in Nigeria) as may be required by the CAC;<\/p>\n\n\n\n

What\nare the requirements for obtaining money lenders\u2019 license (for a company) in\nLagos State?<\/em><\/strong><\/p>\n\n\n\n

1         \nTwo Application Letters in the prescribed form on the letter head paper of the\ncompany: one to the Magistrate\u2019 Court and the other subsequently to the\nPermanent Secretary of the Ministry of Home Affairs;<\/p>\n\n\n\n

2         \nCertified True Copies of the Certificate of Incorporation, the Memorandum and\nArticles of Association (\u201cMEMART\u201d) of the Company and other CAC Forms showing\nthe share capital of the company, the shareholder(s), the director(s), company\nsecretary and other particulars. Please note that the MEMART must contain an\nobject to the effect that the Company engages in the business of providing\nlending services to companies, individuals, etc.;<\/p>\n\n\n\n

3         \nThree (3) years Tax Clearance Certificate (Lagos requirement only) of at least\n2 Individual directors of the Company (if they are more than two directors).\nPlease note that Lagos requires that the company must have at least two (2)\nadult directors. <\/p>\n\n\n\n

4         \nEvidence of maintenance of a current account with a licensed bank in Nigeria;<\/p>\n\n\n\n

5         \nEvidence of payment of Company Income taxes for 3 years (for old company); <\/p>\n\n\n\n

6         \nPassport Photographs of the individual applicant (or of director of a corporate\napplicant) and means of identity;<\/p>\n\n\n\n

7         \nEvidence of application for TIN (this is applicable only when it is a newly\nincorporated company).<\/p>\n\n\n\n

8         \nReference letter from the applicant\u2019s bank.<\/p>\n\n\n\n

9       \nForms B and C from the Magistrate\u2019s Court.<\/p>\n\n\n\n

10       \nPolice Clearance Report.<\/p>\n\n\n\n

What\nare the Applicable Costs for Incorporating and obtaining a Money Lender Certificate\nand Licence?<\/em><\/strong><\/p>\n\n\n\n

\n S\/N\n <\/td>Particulars<\/strong> <\/td>\n Amount (N)<\/strong>\n <\/td><\/tr>
\n 1.<\/strong>\n <\/td>Company registration costs <\/td>\n N<\/s><\/strong>305,000\n <\/td><\/tr>
\n 2.<\/strong>\n <\/td>Costs associated with police report for two directors (@ N50,000 per director) <\/td>\n N<\/s><\/strong>100,000\n <\/td><\/tr>
\n 3.<\/strong>\n <\/td>Company seal, tax registration etc. <\/td>\n N<\/s><\/strong>100,000\n <\/td><\/tr>
\n 4.<\/strong>\n <\/td>Costs for processing Money Lender Certificate at the Magistrate\u2019s Court (N200,000) and Money Lender Licence at the Ministry (N350,000)<\/td> N<\/s><\/strong>550,000 <\/td><\/tr>
\n 5.<\/strong>\n <\/td>Miscellaneous expenses (taxi, telephone calls, printing, data, courier, etc.) <\/td>\n N<\/s><\/strong>200,000\n <\/td><\/tr>
\n 6.<\/strong>\n <\/td>Post licensing registrations with Federal Competition and Consumer Protection Commission (“FCCPC”), the Nigerian Data Protection Commission (“NDPC”) and thee Moneylenders Association of Nigeria (“MAN”)<\/td>Available on request <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Please\nnote that where the two directors do not have three years\u2019 tax clearance certificates\n(\u201cTCC\u201d), there may be additional costs to process their TCCs.<\/p>\n\n\n\n

How\nlong does it take to complete the incorporation and licensing of a Money\nLending company?<\/em><\/strong><\/p>\n\n\n\n

\n S\/N\n <\/td>\n Particulars<\/strong>\n <\/td>\n Estimated Timelines<\/strong>\n <\/td><\/tr>
\n 1.<\/strong>\n <\/td>Company registration <\/td>\n 2 days\n <\/td><\/tr>
\n 2.<\/strong>\n <\/td>Police report for two directors <\/td>\n 5 days\n <\/td><\/tr>
\n 3.<\/strong>\n <\/td>Company seal, bank account opening, tax registration etc. <\/td>\n 10 days\n <\/td><\/tr>
\n 4.<\/strong>\n <\/td>Processing Money Lender Certificate at the Magistrate\u2019s Court <\/td>\n 7 days\n <\/td><\/tr>
\n 5.<\/strong>\n <\/td>Processing Money Lender Licence at the Ministry is subject to satisfactory inspection by the Ministry <\/td>\n 4 to 6 weeks \n <\/td><\/tr>
\n 6.<\/strong>\n <\/td>Other post licensing registrations with Federal Competition and Consumer Protection Commission (“FCCPC”) and Moneylenders Association of Nigeria<\/td> 2 weeks<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The\nestimated timeline for completing the process of incorporation and licensing is\n6 to 8 weeks. Please note that the timeline for the grant of money lender\u2019s licence\nby the Ministry may be longer because of the scheduling of its inspection of\nthe applicant\u2019s physical office before licensing.<\/p>\n\n\n\n

What\nare the benefits of obtaining Money lending Certificate and License<\/em><\/strong><\/p>\n\n\n\n

1.\nRight to institute an action in court to recover the principal loan and accrued\ninterest from a defaulting borrower. It is an offence to lend money for purpose\nof attracting interests unless the lender has obtained a money lender\u2019s\ncertificate and licence.<\/p>\n\n\n\n

2.\nRight to own moveable and immovable property in the company\u2019s name.<\/p>\n\n\n\n

3.\nCertificate and licence serve a huge added advantage and brand visibility.<\/p>\n\n\n\n

4.\nIt can attract serious investors and create an opportunity for business\nexpansion if a money lending business is registered and licensed.<\/p>\n\n\n\n

5.\nProtects the business and promoters from criminal liability for doing money\nlending business without regulatory licence. <\/p>\n\n\n\n

What\nare the procedures for obtaining a Money Lender\u2019s License in Lagos State?<\/em><\/strong><\/p>\n\n\n\n

1.\nThe first step is to make a formal application on the Company\u2019s Letter Head to\nthe Commissioner of Police, Police Command, attaching the applicant company\u2019s\nCertificate of Incorporation, MEMART and other CAC Forms showing the\nparticulars of shareholders and directors of the company.<\/p>\n\n\n\n

2. \nUpon the above application, the Police will obtain the Applicant\u2019s (or\ndirector\u2019s) thumbprints for the purpose of issuing a Clearance Report to the\nApplicant.<\/p>\n\n\n\n

3. \nThereafter, the applicant is required to make an application in a prescribed\nform to the Chief Magistrate located within the Magisterial District where the\nbusiness is situated.<\/p>\n\n\n\n

4.\nIf the application is successful, a Money Lender Certificate (Form B<\/em>)\nfrom the Chief Magistrate along with a Letter which would be addressed to the\nPermanent Secretary of the Ministry, confirming due compliance, and\nrecommending the issuance of the Money Lender Licence.<\/p>\n\n\n\n

5. \nThereafter, a further application for a Money Lender Licence shall be made to\nthe Ministry attaching all the relevant documents.<\/p>\n\n\n\n

6.\nThe next stage is physical inspection of the money lender’s place of business\nby the officials from the Ministry of Home Affairs who, on an agreed date, will\nphysically visit and inspect the premises and the officers of the Applicant\ncompany (including books and records where the applicant has already commenced\noperations). <\/p>\n\n\n\n

7. Upon satisfaction by the official of the Ministry that the applicant has complied with the statutory requirements, the applicant will be issued with a Money Lender License for a period of one (1) year and shall be renewable every year.<\/p>\n\n\n\n

Is there any other mandatory post-licensing registration for digital lenders in Lagos State?<\/em><\/strong><\/p>\n\n\n\n

Yes. The Federal Competition and Consumer Protection Commission (“FCCPC”) has in the exercise of its powers under its enabling law, ventured into the regulation of digital lending business in Nigeria. Recently, in exercise of the powers conferred upon it by sections 17, 18 and 163 of the Federal Competition and Consumer Protection Act, 2018 (\u201cthe FCCP Act<\/strong>\u201d), and all other powers enabling it in that behalf, the FCCPC issued the\u00a0Limited Interim Regulatory\/Registration Framework and Guidelines for Digital Lending, 2022 <\/em>(\u201cGuidelines for Digital Lending 2022<\/em>\u201d)<\/strong>.<\/p>\n\n\n\n

The Guidelines for Digital Lending 2022<\/em><\/strong> provides that every applicant seeking to register with the FCCPC must present a proof of certification of privacy compliance by the NDPC and evidence of membership of a trade or professional association. This presupposes that a digital lender must register with the Money Lenders Association the same way Finance Companies is required to register with Finance Houses Association of Nigeria (“FHA”) or the Microfinance Banks with the National Association of Microfinance Banks (“NAMB”).<\/p>\n","protected":false},"excerpt":{"rendered":"

How is a Loan Company regulated in Nigeria? A loan company, whether buy-now-pay-later (“BNPL”) or digital lender or cooperative society or whatever […]<\/p>\n","protected":false},"author":1,"featured_media":4970,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55,23],"tags":[12,13,14,16,20,21,30,31],"class_list":["post-6255","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fintech-business","category-publications","tag-caccbnbusiness-licencecompany-registrationfinance-company-koriat-lawyers-koriat-and-coloan-agreementmicro-creditmicrofinance-lawyersmoney-lendersme-lawyers-business-lawyers","tag-cbn","tag-financecompany-cbn-koriatlawyers-koriatandco-smelawyers-businesslawyers-microfinancelawyers","tag-moneylender","tag-company-registration","tag-finance-company-koriat-lawyers-koriat-and-co","tag-micro-credit","tag-microfinance-lawyers"],"_links":{"self":[{"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/posts\/6255","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/comments?post=6255"}],"version-history":[{"count":0,"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/posts\/6255\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/media\/4970"}],"wp:attachment":[{"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/media?parent=6255"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/categories?post=6255"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/koriatlaw.com\/2026\/wp-json\/wp\/v2\/tags?post=6255"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}