The Federal Competition and Consumer Protection Commission (FCCPC) has introduced new regulations to monitor interest rates charged by digital lenders, raising concern among Nigeria’s loan app companies.
The latest rules come after widespread complaints from Nigerians about excessive interest rates on loans from digital platforms. The FCCPC’s Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025, now require regular review of lending rates to prevent exploitation.
The Commission shall periodically monitor interest rates for consumer lending and ensure they do not harm consumer interests – FCCPC
However, digital lenders argue this approach overlooks the high risks and costs involved in their business. Gbemi Adelekan, President of the Money Lenders Association, said that interest rates reflect the cost of funds and the risky nature of lending to many Nigerians who lack steady income. He expressed concern that fixed rates without considering these factors could disrupt digital lending’s growth.
Some borrowers have also voiced frustration. A notable case showed a customer offered N2.5 million but required to repay over N6 million within two years, an annual interest rate close to 200%.
Adelekan did praise parts of the new rules that protect customers, such as banning apps from accessing users’ personal data like contact lists and pictures. This, he said, would reduce harassment and encourage better compliance through credit bureaus.
The CEO of Lendsqr, Adedeji Olowe, welcomed the change, saying it shows that digital lending is now part of Nigeria’s formal financial system and will be regulated accordingly.
These regulations build on the 2022 framework that made digital lenders register with the FCCPC. Currently, over 400 loan apps are registered, but issues like borrower harassment remain common. The new rules also introduce fines of up to N50 million for individuals and N100 million for companies breaking the law.
The FCCPC appears set to clamp down harder on unethical practices while digital lenders seek a balance between fair pricing and sustainability in a challenging market.
