Unlike Lagos State, where the procedure for Money Lender’s license is quite bureaucratic and very formal, the procedure in Edo State is less formal and seamless for Applicants. Also, the timeline for completion of the process in Edo State is short.
We have provided some details about the requirements, procedure, costs and timeline for obtaining money lender’s license in Edo State in a Question and Answer format:
You can also read about the requirements for setting up a money lender company in Lagos State here.
1. Any share capital requirement for Money Lenders companies in Edo State?
There is no share capital requirement for Money Lenders’ company in Edo State. Unlike Lagos and Abuja, where the regulatory authorities prescribe minimum share capital of N20 Million for money lenders company, there is no such requirement in Edo State.
This means that an Applicant in Edo State can carry on Money lenders business with at least One (1) Million shares. All that is required is for the money lenders company to be registered with the Corporate Affairs Commission (“CAC”).
2. What are the requirements for Company registration with CAC?
A company desirous of carrying out a money lenders business must register the company with CAC. Registration of companies with CAC can now be completed in 24 hours after submission. The registration process is 100% digital.
The mandatory requirements for company registration with CAC are listed and explained as follows:
(a) Two Proposed Names of the Company: The Applicant shall be required to submit two (2) Proposed Names for reservation. These two (2) proposed names must be submitted to CAC (using the online portal) for pre-application name search, screening and approval. One of the names may be approved by the CAC within 24 hours.
(b) Proposed Registered Address, Email and Phone Number of the Company: Every company must have its registered address in Nigeria. Also, it is important to provide the email and phone number of the company (please note that the email address and phone numbers of the shareholders or directors may be used in the meantime). The registered address, email and phone numbers are also relevant for use and record of the tax authorities.
(c) Details of Shareholders, Directors and Company Secretary of the Company: The old law that a company must have at least two (2) shareholders or two (2) directors has now been abolished by the Companies and Allied Matters Act 2020 (“CAMA 2020”). Now, a company may be registered with at least one (1) shareholder, director and company secretary who must present the following details:
i. Names;
ii. Home and contact addresses;
iii. Email Addresses;
iv. Phone Numbers;
v. Date of Birth;
vi.Occupation;
vii. A copy of government-issued means of identity (preferably data page of international passport); and
viii. Electronic signatures.
Please note that there is no minimum required number of shareholders and directors. However, we recommend that a money lender company seeking to be licensed in Edo State should have not less than two shareholders and two directors.
In Lagos State, for example, in order to be licensed as a money lender company, the Ministry of Home Affairs, which is the licensing authority for money lender business in Lagos State, insists that a money lender company must have at least two (2) directors, amongst other requirements for setting up a money lender company in Lagos State. So, even though the CAMA 2020 allows a one-director company, the sector of operation must be thoroughly reviewed in order to ensure that a higher number of director or other conditions are not otherwise required.
3. What are the Applicable costs for registering a Money Lender Company with CAC?
The costs of registration of a company with CAC are usually dependent on the amount of share capital of the company. This is because the share capital of a company attracts a stamp duty (payable to the Federal Inland Revenue Service) in addition to the incorporation or filing fee chargeable by the CAC.
For a Company with N1 Million share capital, the total cost of company registration with CAC is less than N50,000.
4. What are the Applicable costs for obtaining money Lenders’ licence in Edo State?
The applicable costs payable for obtaining money lenders’ license in Edo State include the Application/Processing Fee as well as Licence Fee. The total costs are about N100,000 excluding professional fees and company registration costs mentioned above.
5. Is there any requirement for the Company to maintain a Current Account as a precondition for obtaining a Money Lenders’ licence?
No. Unlike Lagos and Abuja, where maintaining a current account is a mandatory requirement for obtaining money lenders license, this is not a compulsory requirement for obtaining the licence in Edo State.
6. Is Police Clearance certificate a mandatory requirement for obtaining for the license?
One of the essential requirements for money lenders’ license in Lagos and Abuja is the submission of police clearance certificate. This is not a requirement in Edo State and some states in the southern region of Nigeria.
7. What are the requirements and procedure for Money Lenders’ license?
The application requirements are the following documents:
- Application letter;
- Photocopy of Company’s incorporation documents;
- Affidavit of Good conduct signed by two directors with two director’s passport photographs affixed on the Affidavit of Good Conduct;
- The Curriculum Vitae of the Directors of at least Two (2) Directors.
8. Who is the issuing authority for Money Lenders’ license?
The issuing authority is the Chief Magistrate Court.
9. Is the Applicant required to submit Directors’ Tax clearance certificate to obtain the License?
No. There is no requirement for Directors’ Tax clearance certificate in Edo State.
10. Is there requirement for Inspection of Applicant’s office before issuance of Money Lenders’ license?
This is no longer a requirement for issuance of money lenders license in Edo State. However, this remains a sacrosanct procedure in Lagos State before issuance of money lenders license by the regulatory authority.
11. What is the validity period for Money Lenders’ license?
Money lenders’ license in Edo state is valid for the period of One (1) year, which is subject to renewal for another One (1) year. However, notwithstanding the date of issuance, money lender licence expires on the 31st of December of the year of issuance.
12. What is the Timeline for obtaining money Lenders’ license?
It takes about 7 to 10 working days for the license to be processed after submission of Application.
You can also read about the requirements for setting up a money lender company in Lagos State here.
