FCCPC Imposes ₦100m Fines on Rogue Loan Apps Under New Digital Lending Regulations

The Federal Competition and Consumer Protection Commission (FCCPC) has rolled out the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations (DEON Consumer Lending Regulation) 2025, a landmark framework designed to tackle unethical practices among Nigeria’s digital loan apps.

FCCPC Targets Rogue Loan Apps

For years, Nigerians have complained about harassment, intimidation, defamatory tactics, and misuse of personal data by loan app operators. The new rules, announced in Abuja by FCCPC’s Executive Vice Chairman/Chief Executive Officer, Mr Tunji Bello, aim to curb these exploitative practices and restore public confidence in digital lending.

“These regulations draw a clear line that innovation is welcome, but not at the expense of the rights and dignity of consumers or the rule of law,” Bello said. He stressed that the framework would guarantee fairness, transparency, ethical recovery practices, and stronger consumer redress mechanisms.

Key Highlights of the DEON Regulation

The DEON Regulation, issued under Sections 17, 18, and 163 of the Federal Competition and Consumer Protection Act (2018), sets out strict compliance measures for all digital lenders in Nigeria, including Mobile Money Operators (MMOs) and Digital Money Lenders (DMLs).

• Mandatory Registration: All digital lenders must register with the FCCPC within 90 days of commencement.

• Heavy Sanctions: Non-compliant operators face fines of up to ₦100 million or 1% of annual turnover, alongside potential five-year disqualification of company directors.

• Consumer Safeguards: The framework bans pre-authorised lending, misleading marketing, and unclear loan conditions.

• Data Privacy Rules: Lenders must uphold strict data protection standards and are forbidden from harassing or defaming borrowers during loan recovery.

• Fair Market Conduct: Partnerships between lenders must be jointly registered, and any dominance-driven or monopolistic agreements require FCCPC approval.

• Local Participation: For airtime and data lending, at least one partner in the service must be a Nigerian-owned entity.

Strengthening Responsible Digital Finance

FCCPC’s Director of Corporate Affairs, Mr Ondaje Ijagwu, explained that the regulation is intended not only to stop abusive practices but also to promote financial inclusion through a responsible digital credit system.

“The aim is to ensure innovation in financial services evolves responsibly, placing consumer dignity and data privacy at the centre,” Ijagwu said.

The FCCPC has encouraged Nigerians to report cases of harassment, hidden charges, unfair interest rates, or privacy breaches via its official complaints portal: lenderstaskforce@fccpc.gov.ng.

Impact on Nigeria’s Loan App Market

Nigeria’s mobile lending sector has grown rapidly over the past five years, becoming a vital credit lifeline for millions. However, the surge in digital loans has been marred by unregulated interest rates and abusive recovery tactics.

With the DEON Regulation taking effect on 21 July 2025, analysts believe it marks a turning point for the industry—forcing rogue operators out of the market while supporting ethical lenders who prioritise transparency and consumer rights.

“No consumer should be harassed, defamed, or lured into unsustainable debt under the guise of digital lending,” Bello emphasised.

Outlook

The FCCPC’s crackdown signals a new era for Nigeria’s digital lending industry, where responsible innovation is encouraged but exploitative practices are penalised. If effectively enforced, the regulation could transform mobile credit services into a safer, more ethical ecosystem that protects millions of borrowers nationwide.