Introduction
On the 25th of July 2025, the Federal Competition and Consumer Protection Commission (FCCPC) welcomed a new era of regulation with the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025 (the Digital Lending Regulations). While these rules establish clear licensing, registration, and disclosure requirements, their real impact will be felt in how they penalise non-compliance. The new regulation makes it clear that digital lenders, who fail to register, renew, or comply with reporting obligations, face not only financial penalties but also reputational and operational risks.
This article looks at the exposure of digital lenders under the new FCCPC Regulations, the obligations for regulators to register, how this affects the cost of business, the overall impact, and the consequences of non-compliance.
What exactly has the FCCPC introduced?
On the 25th of July 2025, the FCCPC released new regulations for digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025 (the Digital Lending Regulations). The primary aim of this new regulation is to bring structure and accountability into a fast-growing sector that had previously been loosely regulated.
What does the licensing process look like, and what are the obligations to register?
Every digital lender is now required to register with the FCCPC. To do this, they must submit a compliance audit, a Data Protection Impact Assessment (DPIA), and pay an approval fee. The fee here can be up to N1 million for two apps, with an extra N500,000 per additional app, capped at five apps.
The regulations have now made it mandatory for all digital lenders to apply for and obtain FCCPC approval within ninety (90) days of commencement. The approvals for this run for a fixed three-year period, expiring on 31st December of the third calendar year from issuance, with renewal due 31st March of the following year. Any approval not renewed within this timeline is deemed expired, and the business is automatically considered unlicensed. This regulation is a significant change and shift from the Limited Interim Regulatory Framework & Guidelines for Digital lending that was issued in August 2022, in which approvals had no defined expiry period.
What are the Consequences for Non-Compliance?
The exposure for non-compliance is quite severe. The consequence for companies that continue to operate without valid registration is that they risk being fined up to N100 Million Naira or 1% of their annual turnover, whichever is higher. Whilst Individuals will be fined up to N50 Million Naira, and company directors risk being permanently barred from holding managerial or board positions for up to five years.
Looking beyond the financial sanctions, the FCCPC has the authority to suspend or revoke approvals, delist apps from online stores, and in extreme cases, shut down non-compliant platforms altogether. This is a sharp turn from the earlier approach, where consequences were regulators relied mainly on app removal or office raids to curb misconduct.
All this has further reinforced not only the regulatory and financial risk of non-compliance but also significant reputational damage, as customers would not trust a digital lender that has it is license suspended or had its app delisted before.
Who falls under these rules?
The scope of the new regulation is very broad and applies not only to fintech lenders but also to telecom operators and other businesses involved in airtime, data, and barter-based lending. Even financial institutions licensed by the Central Bank of Nigeria (CBN) are not exempt and could fall under the FCCPC oversight unless they receive a formal exemption.
What compliance obligations do lenders now have?
The regulations require digital lenders to file annual returns and submit compliance reports every six months. They are also required to provide records within 48 hours upon request and undergo regular audits aligned with Nigeria’s data protection and communications laws. The consequence of failing to meet the obligation would be treated as a deliberate obstruction and could also attract penalties that are equivalent to the penalties set out for non-registered lenders. This would, in turn, expose the operators to sanctions. The FCCPC also retains the right to monitor interest rates and assess whether they are fair or an exploitation.
Why is immediate action necessary?
The FCCPC has moved to a structured penalty regime with clear enforcement mechanisms; non-registration or late renewal, or failure to file reports can now effectively lead to heavy fines being imposed, loss of license, and reputational damage. For digital lenders, this means that compliance cannot be seen as just a box-ticking exercise, as compliance will now be seen as the foundation of operational legitimacy.
How will this affect the cost of doing business?
In adhering to the compliance of the new regulation, operating costs would be raised, and this would affect all digital lending companies, particularly smaller lending companies. These costs would invariably be passed on to the borrowers, thereby making loans more expensive. Regulators of lending models that relied heavily on unconventional credit scoring, such as accessing phone data, will need to have their models redesigned. All partnerships with third parties will now be vetted by the commission, and this process is one that could take a minimum of 30 days, which in turn could create delays for product launches and updates.
So, what is the overall impact?
Unlike the Limited Interim Regulatory Framework & Guidelines for Digital lending that was issued in August 2022, the new rules represent an established control of proactive management, rigorous monitoring, and systematic supervision. For consumers, the new rules promise improved transparency and protection. For lenders, the new rules introduce a new era that demands accountability at a higher cost and with stricter obligations. Digital lenders who fail to comply risk being imposed with not only fines but would likely experience reputational damages, while those who comply will be better positioned to earn consumer trust and thrive in a regulated marketplace.
Conclusion
The Digital Lending Regulations of 2025 have fundamentally changed the compliance landscape. For digital lenders, the exposure of failing to register, renew, or file timely reports is no longer theoretical as it now carries clear, enforceable consequences. The consequences of non-compliance, which include heavy fines, suspension, delisting of apps, and reputational damages, are now guaranteed outcomes for non-compliance. However, digital lenders who adapt early will not only avoid sanctions but also strengthen their consumer credibility in a market that is fast becoming both competitive and tightly regulated.
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About KORIAT & CO.
We are a commercial law firm with head office in Lagos, Nigeria. We assist clients from different nationalities in company registration and processing of business licence in Nigeria, Ghana, Kenya, Rwanda and Uganda. We also provide company secretarial services and general legal support for registered businesses.
The above article is not legal advice and does not automatically make our readers our clients unless they specifically instruct us to act or represent them in any way.
Please contact Koriat & Co. through admin@koriatlaw.com or 09067842241 (also WhatsApp) if you require additional information about or assistance in registering or getting a fintech licence in either payment or lending sectors.
