Introduction

The digital lending space in Nigeria has exploded in recent years, providing millions of Nigerians with fast access to loans through mobile apps. While this innovation has helped bridge financial gaps, it has also introduced serious concerns—such as data privacy abuse, harassment, excessive interest rates, and lack of transparency.

To curb these excesses and protect consumers, the Central Bank of Nigeria (CBN) and the Federal Competition and Consumer Protection Commission (FCCPC) have introduced specific rules and regulatory frameworks guiding how loan apps operate in the country.

This article explains everything you need to know about CBN and FCCPC regulations governing digital loan platforms, how these rules work, what rights you have as a borrower, and how to report illegal or unethical loan apps.

Why Regulations Are Necessary in Nigeria’s Lending Space

Before 2022, many digital lenders in Nigeria operated unchecked. Borrowers frequently faced:

• Harassment via SMS, calls, and WhatsApp

• Public shaming through defamatory messages

• Excessive interest rates and hidden fees

• No customer support or dispute resolution channels

• Unlawful access to users’ contacts and personal data

These practices became so widespread that they drew attention from local and international watchdogs. In response, CBN and FCCPC joined forces with NITDA and ICPC to create a multi-agency regulatory framework.

Role of CBN in Regulating Loan Apps

The Central Bank of Nigeria (CBN) is the primary regulator of Nigeria’s financial institutions. Its responsibilities in the digital lending space include:

1. Licensing Financial Institutions

CBN licenses:

• Microfinance Banks (MFBs)

• Finance Companies

• Payment Service Providers

Only loan apps backed by CBN-licensed institutions are legally allowed to offer financial services like lending, deposits, and digital payments.

2. Monitoring Financial Practices

CBN sets and enforces rules on:

• Loan disbursement procedures

• Interest rate caps

• Disclosure of loan terms

• Repayment schedules

• Non-performing loan (NPL) management

3. Ensuring KYC Compliance

KYC (Know-Your-Customer) is a CBN-mandated requirement. Legitimate lenders must:

• Collect and verify your BVN

• Confirm your NIN or national ID

• Record address and income source

• Securely store your personal data

Loan apps that don’t follow KYC guidelines are violating CBN rules and could be shut down.

Role of FCCPC in Regulating Digital Lenders

The Federal Competition and Consumer Protection Commission (FCCPC) focuses on protecting consumers from unfair, misleading, or abusive business practices. In 2022, the FCCPC became the lead agency regulating digital lenders in Nigeria.

1. Digital Lending Guidelines (2022–2023)

The FCCPC introduced its Limited Interim Regulatory Framework for digital lenders, which includes:

• Registration with the FCCPC

• Filing of company details, ownership, and app platforms

• Disclosure of interest rates and fees

• Prohibition of unethical collection practices

• Data privacy and protection compliance

Only apps that meet these standards are allowed to operate legally.

2. Enforcement Actions

The FCCPC has:

• Delisted illegal loan apps from the Play Store

• Frozen bank accounts of defaulters

• Investigated and shut down abusive lenders

• Collaborated with Google to enforce app compliance

• Published the List of Approved Digital Lenders

You can view the current list here: 👉 https://www.fccpc.gov.ng

Key Rules Guiding Loan Apps in Nigeria

Here’s a summary of must-follow rules under the CBN and FCCPC frameworks:

1. Mandatory Registration and Approval

All loan apps must:

• Register with the FCCPC

• Disclose their ownership and physical address

• Be linked to a CBN-licensed financial institution

• Submit a compliance commitment to ethical practices

Apps that fail to register are illegal and should be reported.

2. Transparent Loan Terms

Loan apps must clearly display:

• Interest rates (APR)

• Repayment period and due dates

• Default charges or penalties

• Loan limits and conditions

Hidden fees or misleading promotions are banned.

3. Ethical Loan Recovery Practices

Loan recovery must not involve:

 Threats of violence
 Sending messages to contacts or coworkers
 Publishing a borrower’s name or picture
 Using defamatory, false, or abusive language

Borrowers should never be harassed or shamed.

4. Responsible Data Handling

Loan apps are bound by the Nigeria Data Protection Act (2023) and must:

• Only collect necessary user data

• Get informed consent for data use

• Refrain from accessing your contact list, SMS, or media without justification

• Protect user data with strong security protocols

5. Fair Interest Rates

While digital lending is riskier than traditional banking, interest rates must still be fair and justifiable.

FCCPC-approved apps generally offer:

• Interest rates between 15% and 35% APR

• Loan periods from 7 to 180 days

• No hidden or illegal fees

Apps charging 200–400% APR or applying daily compounding interest are considered predatory lenders.

Penalties for Violating CBN and FCCPC Rules

Loan apps found in violation may face:

• Fines and sanctions

• Delisting from Play Store or App Store

• Bank account freezes

• Criminal investigations

• Permanent shutdown

Borrowers who have suffered defamation or harassment can also sue for damages under Nigerian law.

How to Confirm if a Loan App is Regulated

Follow these steps to verify if a loan app is CBN/FCCPC-compliant:

Step 1: Visit the FCCPC’s Approved Lenders List

https://www.fccpc.gov.ng

Step 2: Cross-check the app’s business name on the CAC portal

https://search.cac.gov.ng

Step 3: Confirm the app is linked to a CBN-licensed MFB or Finance Company

Step 4: Read reviews on Google Play or Apple App Store

Avoid apps with consistent complaints of harassment or fraud.

Borrower Rights Under FCCPC & CBN Rules

As a Nigerian borrower, you have the right to:

Fair treatment during loan application and recovery
Transparent loan terms and conditions
Data privacy and protection
Freedom from harassment or public defamation
File complaints and seek redress from regulatory agencies

How to Report a Violating Loan App

If you’ve been harassed, overcharged, or defamed by a loan app:

Report to FCCPC:

 Email: contact@fccpc.gov.ng
 Website: https://www.fccpc.gov.ng

Report to NITDA:

 Email: info@nitda.gov.ng
For data privacy violations

Report to Google Play Store:

Flag the app as “Inappropriate” or “Privacy Violation”

Conclusion

CBN and FCCPC have taken bold steps to sanitize Nigeria’s growing digital lending space. These regulations are designed to protect you—the borrower—from exploitation, abuse, and data theft.

Before using any loan app, verify its registration, review its loan terms, and make sure it aligns with CBN and FCCPC rules. If you encounter an app that defames, threatens, or invades your privacy, report it immediately.

The power to build a fair and responsible lending ecosystem starts with staying informed and standing up for your rights.

Key Takeaways

• CBN licenses financial institutions behind loan apps

• FCCPC regulates digital lenders to protect consumer rights

• Loan apps must be registered, ethical, and transparent

• Defamation, harassment, and unauthorized data use are illegal

• You can report bad loan apps to FCCPC, NITDA, or Google