INTRODUCTION
On Friday, 22nd May 2026, the Federal Competition and Consumer Protection Commission (FCCPC) issued a circular announcing the suspension of the implementation and enforcement of the Digital, Electronic, Online or Non‑Traditional Consumer Lending Regulations 2025 (“DEON Regulations 2025”). This decision followed an ex parte order of the Federal High Court in Lagos, delivered on 15th April 2026 by Honourable Justice A. L. Allagoa, restraining the FCCPC from enforcing the DEON Regulations.
The suspension places digital lending companies in a state of uncertainty, particularly regarding onboarding and verification processes with essential partners such as payment system providers (e.g., Flutterwave, Paystack) and application stores (Apple App Store, Google Play Store). These partnerships are essential to the smooth operation of digital lending businesses.
Under the DEON Regulations, service providers in the digital lending ecosystem were required to obtain written FCCPC approval before finalising partnership agreements or onboarding digital lenders on their platforms. With the suspension in place, lenders face delays and disruptions in launching or maintaining their applications and services.
This article examines whether the inability of digital lenders to obtain FCCPC approval due to the suspension should prevent them from proceeding with onboarding, verification, and app launches.
- What Is the Background and Regulatory Context of the DEON Regulations 2025?
Nigeria’s digital lending sector has witnessed rapid growth since 2020, offering millions of citizens quick access to credit through mobile applications and online platforms. However, this growth also led to widespread consumer complaints, including exploitative interest rates and aggressive debt recovery practices.
In response, the FCCPC, exercising its powers under sections 17, 18, and 163 of the Federal Competition and Consumer Protection Act, 2018 (“FCCPC Act”), introduced the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 (“Interim Guidelines”). These guidelines required digital lenders to register with and obtain FCCPC approval before commencing operations.
Consequently, the FCCPC directed payment gateways (such as Paystack and Flutterwave) and financial service providers to refrain from onboarding or processing transactions for unapproved lenders. Similarly, app stores like Google Play and Apple App Store were instructed not to host unapproved loan applications. FCCPC approval thus became a mandatory prerequisite for digital lenders seeking to partner with service providers.
Building on the Interim Guidelines, the FCCPC introduced the DEON Regulations on 21st July 2025, establishing a comprehensive framework for digital and electronic consumer lending in Nigeria. The accompanying Digital, Electronic, Online or Non‑Traditional Consumer Lending Guidelines 2025 (“DEON Guidelines”), effective 18th November 2025, expanded the scope of regulation beyond the Interim Guidelines of 2022, thereby strengthening oversight of the sector.
- What are the Implications of the Suspension of the DEON Regulations 2025 for Digital Lenders?
The suspension of the DEON Regulations 2025 means that the FCCPC will no longer issue approvals to digital lenders. Indeed, in a press statement dated 28th June 2026, the Commission confirmed that it has ceased granting new approvals or licences, in compliance with the ex parte order of the Federal High Court restraining implementation of the DEON Regulations pending further proceedings.
Consequently, partnerships with payment gateways (such as Flutterwave and Paystack) and app stores (including Google Play and Apple App Store) have been stalled. Without the FCCPC approval letter, digital lenders are unable to proceed with onboarding on payment platforms or launching their applications, since these platforms previously and till this moment are still requiring FCCPC approval as a precondition. This has resulted in delays in app launches, updates, and transaction processing for digital lenders.
In effect, the suspension of the DEON Regulations 2025 has created a regulatory vacuum. Payment gateway providers and app stores are uncertain whether FCCPC approval remains a mandatory requirement for onboarding digital lenders, leaving them in limbo and hesitant to proceed without exposing themselves to potential legal risks.
- What are the Legal Solutions to the Vacuum Created by the Suspension of the DEON Framework?
The suspension of the DEON Regulations has undeniably created uncertainty for digital lenders in Nigeria. This regulatory vacuum particularly affects their ability to be onboarded by payment platforms and app stores, which previously required FCCPC approval as a condition precedent.
As critical gatekeepers in the digital lending ecosystem, payment service providers and app stores must now take into account the legal and constitutional rights of digital lenders to continue their operations using alternative compliance documentation and licences.
Digital lenders have a legitimate expectation to continue their business activities, having already obtained moneylenders’ licences under state laws and complied with data privacy and protection requirements by registering with the Nigeria Data Protection Commission (NDPC) and conducting mandatory data audits. The suspension of the DEON Regulations should not, therefore, constitute a barrier to their lawful operations.
- How does the The Doctrine of Legitimate Expectation and Its Impact on Digital Lenders Vis-à-Vis Payment Service Providers and App Stores?
The doctrine of legitimate expectation provides that where a public authority has made a representation, promise, or has consistently acted in a particular manner, affected members of the public are entitled to rely on such conduct. Public authorities are thereby required to act fairly, consistently, and in good faith, save where overriding public interest justifies a departure.
In the case of F.B.I.R. v. Halliburton (WA) Ltd (2016) 4 NWLR (Pt. 1501) 53 (P. 98, paras. C-E) the Court of Appeal of Nigeria Per IKYEGH, JCA affirmed that legitimate expectation arises from regular practices of public authorities which individuals reasonably rely upon to arrange their business affairs. Fairness and transparency are the pillars of this doctrine.
The textbook on Administrative Law (6th edn, Oxford University Press, 2016, p. 315) authored by Peter Leyland & Gordon Anthony espoused the understanding of legitimate expectation stating that one of the ways legitimate expectation can be created is as follows:
“In broad terms, there are three ways in which the conduct of a public authority can give rise to a legitimate expectation (for fuller analysis see Schenberg 2000).
The first-and strongest foundation for a legitimate expectation-is where the public authority makes a representation that it will, or will not, act in a particular way (representations for these purposes may be found in one or more of an individual statement, a circular, a report, or some other official document). Although it may be difficult to establish that a representation has been made to a particular individual and sounds in law—for example, where government makes a pre-election statement on a matter (see R v Secretary of State for Education and Employment, ex p Begbie [2000] 1 WLR 1115)—it is clear that the courts will recognise an expectation as having been created where there has been a promise or a ‘clear and unambiguous’ representation to an individual. This is what happened in the seminal Coughlan case that we examine below (13.4), where a severely disabled individual moved to a residential care facility on the public authority’s promise that it would be her ‘home for life’. In those circumstances, the Court of Appeal accepted that the specific and individualised nature of the representation had given the representation ‘the character of a contract’ and that the authority could resile from it only where there was a compelling public interest justification for doing so. On the facts, no such justification was found.”
The suspension of the DEON framework is a textbook example of when the doctrine of legitimate expectation should apply. Digital lenders, having complied with existing state licensing regimes and national data protection requirements, reasonably relied on the regulatory environment established by the FCCPC to structure their operations. The abrupt suspension of DEON, coupled with the FCCPC’s cessation of approvals, should not extinguish their right to continue lawful business activities.
Payment service providers and app stores, as critical enablers of digital lending, ought to onboard these lenders based on their valid state licences and NDPC compliance. To insist on FCCPC approval when it is publicly known that such approvals are no longer being issued would amount to an unfair denial of legitimate expectation and an unnecessary obstruction of lawful commerce. Upholding fairness, consistency, and good faith requires that these platforms recognize the legitimacy of digital lenders’ existing compliance measures and facilitate their continued participation in Nigeria’s digital financial ecosystem.
- What are the Constitutional Rights of Digital Lenders?
Beyond administrative law principles, the Nigerian Constitution guarantees the right to freedom of trade, occupation, and business under Section 16(1)(c), which obliges the State to ensure that citizens have the opportunity to secure adequate means of livelihood. Additionally, Section 44 protects against arbitrary deprivation of property, which includes the right to conduct lawful business without undue interference.
Accordingly, digital lenders who have complied with existing statutory requirements such as obtaining moneylenders’ licences and registering with the NDPC are constitutionally entitled to continue their operations. No policy, agency, or entity should arbitrarily bar them from conducting business, particularly in the absence of an operative regulatory framework or its suspension.
CONCLUSION
The suspension of the DEON Regulations 2025 has created a regulatory gap that threatens the stability of Nigeria’s digital lending ecosystem. However, this vacuum should not be interpreted as a prohibition on digital lending operations. Lenders who have obtained moneylenders’ licences and complied with NDPC requirements retain both a legitimate expectation and a constitutional right to continue their business.
Payment gateways and app stores, as indispensable partners in the ecosystem, should recognise these rights and allow onboarding based on existing compliance frameworks. To do otherwise would not only undermine the doctrine of legitimate expectation but also infringe upon constitutionally protected freedoms of trade and business.
Ultimately, while regulatory clarity is desirable, the suspension of the DEON Regulations must not be allowed to paralyse the sector. Upholding fairness, consistency, and constitutional guarantees will ensure that digital lenders continue to provide vital financial access to millions of Nigerians, pending the resolution of the regulatory impasse.
