This follows a decline in inflation, which has fallen for 11 consecutive months to 15.1% in January, according to CBN Governor Yemi Cardoso.

The MPR sets the benchmark for borrowing costs in the economy. Lowering it could reduce funding expenses for digital lenders, who rely on borrowed capital rather than customer deposits.

“Digital lenders and members of the Money Lenders Association usually borrow at interest rates linked to MPR, so any change in such MPR will have a significant impact on our cost of lending to customers,” Gbemi Adelekan, president of the Money Lenders Association, said in a report.

Unlike commercial banks, which fund loans largely with customer deposits, most digital lenders depend on wholesale funding, private capital, or institutional borrowing.

This makes them highly sensitive to changes in benchmark rates. High MPR levels over the past year have forced many lenders to either raise loan rates or absorb thinner margins.

Currently, commercial banks charge annual interest rates exceeding 30% in some cases, while digital loan apps charge between 5% and 15% monthly.

Experts caution that borrowers should not expect immediate relief.

“Everyone benchmarks around MPR and their cost of borrowing,” said Babatunde Akin-Moses, co-founder of digital lending app Sycamore. “Rates should come down as the cost of funds becomes cheaper, but it may not happen immediately since some loans are already in effect, and may not have agreed variable rates with customers.”

Adeshina Adewumi, CEO of Trade Lenda, a digital bank for small businesses, also anticipates only modest changes. “I do not envisage any significant impact,” he said.

“However, a lower MPR means lower cost of funds to digital lenders, and we can afford to relax our numbers slightly.” Adelekan expects loan app interest rates to stay largely within the current range for now.

The digital lending sector in Nigeria has grown even as households seek short-term credit to manage living costs and limited access to traditional bank loans.

As of February 2026, the Federal Competition and Consumer Protection Commission had authorised 469 digital lenders. Consumer credit reached ₦3.11 trillion ($2.31 billion) in Q3 2025, with personal loans accounting for more than two-thirds of activity.

High interest rates have prompted lenders to move away from small nano loans, usually under ₦10,000, toward larger loans for customers with verifiable income.

“High MPR rates led to a tightening of credit by our members,” Adelekan said. “Lately, most of our digital lenders are shifting away from high-risk, small-ticket nano loans (under ₦10,000) toward quality and customers with verifiable income to reduce our non-performing loans.”

The sector is now prioritising portfolio quality over rapid user growth, showing a prudent recalibration as borrowing conditions gradually respond to monetary policy easing.

High-cost borrowing often forces people to take new loans to pay off existing debts, creating a vicious debt cycle, particularly affecting lower-income Nigerians.

The number of approved digital lenders in Nigeria has increased by 79.77% since April 2023, reaching 311 registered lenders by September 2024. 

This growth aligns with a 329.28% year-on-year rise in personal loans, which totalled ₦7.52 trillion in March 2024, according to the Central Bank of Nigeria (CBN). 

The Federal Competition and Consumer Protection Commission (FCCPC) registers digital lenders under the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending 2022, requiring registration and approval. 

Fully approved lenders grew from 119 to 269, while conditional approvals fell from 54 to 42. The rise in consumer credit is linked to inflation, which reached 32.15% in August 2024, and the increasing demand for accessible loans through fintech.

Growing Consumer Credit and Inflation

The CBN attributes the surge in consumer credit to inflation and the popularity of loan apps. A 2023 report from Piggyvest showed that four in ten Nigerians are in debt, with 26% owing loan apps. Another study from SBM Intelligence found 27% of Nigerians, across income categories, turning to loan apps to cope with living expenses amidst record inflation. 

Trade Lenda’s CEO Adeshina Adewumi noted that “rising cost directly impacts the need to access more funds.” Similarly, Money Lenders Association President Gbemi Adelekan confirmed that “demand for loans has increased double-fold due to hardship,” with loan demand growing at 5% monthly, according to Babatunde Akin-Moses of Sycamore.

The Impact on Borrowers and Economic Distress

Loan apps are popular for their accessibility and speed. Apps like FairMoney, Carbon, and Palmcredit have made it possible for people to get quick, unsecured loans. 

According to recent reports, these platforms have collectively issued billions of naira in loans. The apps appeal because they require no collateral, have quick processing times, and are available to people without access to traditional banking. 

CBN governor Olayemi Cardoso predicted that mobile money and digital lending would drive service sector growth, with more people borrowing. 

However, Prof. Bongo Adi from Lagos Business School noted that most loans are for consumption, pushing borrowers into deeper debt. His research shows that borrowers spend their loaned funds quickly, then struggle to repay, driving them further into financial instability.

Loan Sharks and the Debt Trap

Loan apps often charge high interest rates, sometimes reaching 90%, mimicking traditional loan sharks. Borrowers face challenges with high repayment demands, hidden fees, and aggressive recovery methods, such as harassment and public shaming. What initially seems like a short-term solution can quickly spiral, leading to a debt trap that is difficult to escape.

On average, digital loan apps charge monthly interest rates of 15-30%, with annual rates surpassing 200% in some cases.

These add to financial distress and mental health issues, with anxiety and depression on the rise among borrowers. 

Poverty and Debt’s Impact

Approximately 70% of Nigerians live on less than ₦1,500 per day. High-interest loan repayments take away household incomes, forcing families to sacrifice essentials and perpetuating the poverty cycle. 

This financial limitation affects the current generation and also risks intergenerational poverty, impacting children’s future education and growth opportunities.

Regulatory Challenges and the Need for Reform

While the FCCPC introduced a regulatory framework in 2022, enforcement remains challenging due to the volume of loan apps and the complexity of monitoring their practices. 

Former FCCPC CEO Babatunde Irukera has highlighted the issue of multiple loans from various apps leading to unmanageable debt. A centralized credit information system will improve accountability by offering lenders insights into borrower histories, promoting better lending methods. 

However, gaps in consumer protection remain, pointing to the need for stronger regulations, including possible interest rate caps, transparency requirements, and limitations on debt collection methods.

Proposed Solutions: Alternatives and Financial Literacy

Expanding financial literacy programs could empower Nigerians to make better borrowing decisions. Community-based lending models, like cooperatives and savings groups, could provide low-interest options. 

Collaboration between NGOs, financial institutions, and the government could help provide affordable loans and support financial education. With these measures, Nigeria can address the risks associated with digital loan apps while providing safe financial alternatives for those in need.

Strengthen Regulatory Frameworks

• Enforce Existing Regulations: The Federal Competition and Consumer Protection Commission (FCCPC) and the Central Bank of Nigeria (CBN) should enforce existing regulations more strictly to ensure compliance by digital lenders.
• Update Guidelines: Regularly update the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending to address emerging issues and close loopholes.

Increase Financial Literacy

• Educational Programs: Implement nationwide financial literacy programs to educate consumers about responsible borrowing, the risks of high-interest loans, and how to read loan terms and conditions.
• Workshops and Seminars: Conduct workshops and seminars in communities to raise awareness about the dangers of falling into debt traps and how to avoid them.

Promote Alternative Financial Services

• Microfinance Institutions: Encourage the use of microfinance institutions that offer lower interest rates and more flexible repayment terms.
• Community Savings Groups: Support the establishment of community savings groups where members can pool resources and access funds without resorting to high-interest loans.

Enhance Consumer Protection

• Transparent Loan Terms: Ensure that loan apps provide clear and transparent information about interest rates, fees, and repayment terms.
• Complaint Mechanisms: Establish strong complaint mechanisms for borrowers to report issues with loan apps and seek redress

Encourage Responsible Lending Practices

• Interest Rate Caps: Implement interest rate caps to prevent loan apps from charging exorbitant rates.
• Ethical Standards: Promote better lending processes among digital lenders, including fair treatment of borrowers and avoidance of harassment and blackmail.

Support for Borrowers in Debt

• Debt Relief Programs: Develop debt relief programs to help borrowers manage and reduce their debt burden.
• Counselling Services: Provide access to financial counselling services to help borrowers develop repayment plans and manage their finances effectively.

The Federal Competition and Consumer Protection Commission (FCCPC) had removed 47 unregistered loan apps from the platform as part of its investigation to curb illegal lending practices. However, many of these apps have turned to using Android Application Packages (APKs) to reach their customers.

APKs allow users to download apps directly via shared links, bypassing the need for official app stores. This tactic has enabled unregistered loan apps to continue their activities, avoiding compliance with FCCPC regulations.

These apps have been notorious for their aggressive and often illegal debt recovery methods, including harassment and defamation of borrowers. By sharing these APK links, the loan apps circumvent the restrictions imposed by the FCCPC and continue to target vulnerable consumers.

Gbemi Adelekan, Chairman of the Money Lenders Association, said these unregistered apps exploit regulatory loopholes to operate freely. He noted that these apps often extend unsolicited loans and use unethical means to recover debts, causing significant distress to borrowers.

In contrast, licensed Digital Money Lenders (DMLs) adhere to the laws and guidelines set by the FCCPC, promoting fair lending practices. Adelekan pointed out that while most licensed DMLs operate ethically, the few unregistered apps damage the industry’s reputation with their unscrupulous tactics.

The FCCPC, under the leadership of Dr. Adamu Abdullahi, is concerned about the rising infractions by these loan apps. In addition to delisting 47 apps, the Commission has placed 88 more on a watchlist and is considering involving law enforcement to address the issue more effectively.

This move aims to bolster consumer protection and maintain accurate standards in Nigeria’s digital lending space. The Commission’s Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, established in 2022, was designed to ensure fair and transparent lending practices and to protect consumer rights.

Dr Abdullahi highlighted that infractions have been increasing as more Nigerians turn to loan apps due to the challenging economic conditions. The FCCPC’s actions come in response to the proliferation of unregistered and potentially predatory loan apps that have been causing distress among Nigerians.

The registration framework was necessitated by the disturbing activities of loan apps in the country, especially the illegal ones, over allegations of rights violations and unfair practices.

As of May 2024, the number of registered loan apps in Nigeria had increased to 284, including 232 companies with full approval and 41 others licensed by the Central Bank of Nigeria (CBN).

This increase in registered apps is a positive response to the regulatory measures, yet the challenge of unregistered apps is still an issue.

The commission, in its recently released 2023 Annual Report, noted the overly intrusive nature of these loan apps, which often gain access to users’ contacts, photos, messages, and other personal data, flouting fundamental principles of data protection and privacy.

Despite Google’s April 2023 policy aimed at curbing such breaches by restricting loan apps’ access to photos and contacts, the illicit practice continues, prompting the NDPC to intensify its efforts. 

Users report that lenders resort to tagging them as criminals and reaching out to contacts after defaulting on loan repayments.

Recognizing the systemic nature of these breaches, the NDPC is pursuing a multifaceted approach, collaborating with other regulatory bodies and third-party platforms utilized by these lenders. 

The commission is spearheading the development of the Nigeria Data Protection Act-General Application and Implementation Directive, which aims to tackle data breaches and enforce data ethics and privacy standards.

The NDPC is actively engaged in a joint effort with regulatory partners through the Joint Enforcement and Regulatory Taskforce to cleanse the digital lending sector of unethical practices. 

In a bid to enhance oversight, the Federal Competition and Consumer Protection Commission now mandates lending entities to secure data protection clearance from the NDPC before commencing operations.

These regulatory interventions come in response to mounting complaints and grievances from consumers, with Citizens’ Gavel, a consumer rights organization, lodging a formal complaint with the FCCPC against 30 unlicensed digital money lenders accused of employing coercive and illegal tactics to extract debts, including defamation and cyberbullying.

In the midst of these challenges, the NDPC is focused on bolstering privacy safeguards and ensuring stringent enforcement mechanisms to hold violators accountable. 

Stakeholders anticipate comprehensive regulatory measures to rein in rogue digital lending practices and safeguard the privacy and rights of Nigerian consumers.

While Renmoney caters to a wide audience, providing instant personal and business loans ranging from ₦6,000 to ₦6,000,000, with flexible repayment plans spanning 3 to 24 months, FairMoney enables users to access loans of up to ₦3,000,000 with repayment terms ranging from 61 days to 24 months.

These digital lending platforms, Renmoney and FairMoney offer quick loans to Nigerians, but while both promise financial ease, a deeper dive reveals areas where improvements are essential.

1. Transparent Terms and Hidden Charges:
Renmoney asserts “No hidden charges,” yet user reviews highlight unexpected deductions, leaving borrowers perplexed. FairMoney, too, needs to address user complaints concerning unclear terms and conditions.

2. Customer Support Experience:
User reviews shows Renmoney’s inefficient customer service, citing delayed responses and rude interactions. FairMoney, on the other hand, faces issues with account login discrepancies, leading to user frustration. Both platforms need to enhance their customer support for a more pleasant user experience.

3. User-Friendly Interface:
While Renmoney offers a relatively straightforward process, FairMoney grapples with login issues, particularly for iPhone users switching from Android devices. Both platforms should prioritize seamless transitions for users, ensuring their experience remains uninterrupted.

4. Data Security and Privacy:
Renmoney emphasizes its app’s security standards, yet user feedback highlights concerns about unauthorized transactions and potential data breaches. FairMoney faces similar challenges, with users expressing worries about privacy invasion and security lapses. Both platforms must invest in robust data protection measures to gain users’ trust.

5. Interest Rates and Loan Repayment:
Both apps feature interest rates ranging from 2.4% to 9.33%, with varying repayment periods. Renmoney’s maximum Annual Percentage Rate (APR) stands at 35.76%, while FairMoney’s APR ranges from 2% to 36%. Clear communication on interest calculations and flexible repayment options are vital for user confidence.

6. User Verification and Account Security:
Renmoney’s app asks for bank card details, raising concerns among users about unauthorized debits. FairMoney struggles with account migration from Android to iPhone, causing login issues. Both platforms should enhance verification processes and offer robust account security features for user peace of mind.

In the competitive digital lending ecosystem, Renmoney and FairMoney need to address user concerns promptly. Transparent communication, responsive customer support, secure data handling, and user-friendly interfaces are essential.

Actively addressing these areas will enable both platforms elevate user satisfaction, fostering trust and loyalty among borrowers.

Nigerian Government on Monday, September 11, 2023, delisted thirty-seven (37) more illegal loan apps.

This was disclosed by the Federal Competition and Consumer Protection Commission (FCPC).

With the development, the number of fully approved loan apps also grew to 164 from 154 as of its last updates, according to Punch newspaper report.

The number of loan apps with conditional approval declined to 38 from 40, and the number of apps on the commission’s watchlist grew to 56 from 20.

Last month FCCPC had permanently delisted and begun the process of deleting at least two loan apps from the Google Play Store for harassing Nigerians.

On August 1, 2023, FCCPC requested Google remove illegal apps operating without regulatory approval or in violation of the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 (Guidelines), from its play store.

See the list of 37 newly delisted loan apps below, as reported by The PUNCH:

1. Swiftkash App

2. Hen Credit Loan App

3. Cash Door App

4. Joy Cash-Loan Up To 1,000,000 App

5. Eaglecash App

6. Luckyloan Personal Loan App

7. Getloan App

8. Easeloan Apps

9. Naira Naija

10. Cashlawn App

11. Easynaira App

12. Crediting App

13. Yoyi App

14. Nut Loan App

14. Cashpal App

15. Nairaeasy Gist Loan App

16. Camelloan App

17. Nairaloan App

18. Moneytreefinance Made Easy App

19. Cashme App

20. Secucash App

21. Creditbox App

22. Cashmama App

23. Crimson Credit App

24. Galaxy Credit App

25. Ease Cash App

26. Xcredit

27. Imoney

28. Naira Naija

29. Imoneyplus-Instant

30. Nairanaija-Instant

31. Nownowmoney

32. Naija Cash

33. Eagle Cash

34. Firstnell App

35. Flypay

36. Spark Credit

37. Luckyloan Personal Loan App

The Federal Competition and Consumer Protection Commission (FCCPC) has outlined the requirements for loan apps that were delisted from the Google Play store to register with the Commission.

This announcement comes as the FCCPC resumes the registration process for digital money lenders after temporarily closing it on March 27, 2023, following multiple deadline extensions.

The Commission stated that it will only consider and process applications from existing loan apps that failed to register before the March 27 deadline if they can provide a justifiable reason for their non-compliance.

The digital lenders affected must present a “justification that sufficiently articulates an acceptable reason or justification for failing to conclude or complete the registration before the expiration of the previously set deadline.”

Furthermore, the FCCPC stated that the applications will be subject to a late processing fee, which can be paid through the Remita platform.

The Chief Executive Officer of the Commission, Babatunde Irukera, explained the decision to reopen the registration process, citing the emergence of new companies seeking registration since the initial window closed.

While a more comprehensive regulatory framework for digital lending is being developed by the Joint Regulatory and Enforcement Task Force (JRETF), the FCCPC will resume accepting and approving eligible applications and requests from digital money lenders. This includes both new businesses and those that failed to comply with the initial registration deadlines.

In cases where loan apps were removed from the Google Play Store or ceased operations due to payment system or gateway issues, the Commission will consider processing such applications only if an acceptable reason or justification for the missed registration deadline is provided.

Irukera emphasized that financial institutions licensed and regulated by the Central Bank of Nigeria (CBN) are exempt from the registration process and can seek approval through a written request, demonstrating their exemption and providing evidence of CBN licensure

This measure will take effect on May 31, 2023, and all the loan apps found on the Apple and Google Play Stores will lose their ability to access their users’ contacts or photos.

Before now, there were several reports of loan apps invading customers’ privacy by sending sometimes derogatory messages to their contacts with debtors’ photos attached.

However, the Nigerian government through the Federal Competition and Consumer Protection Commission decided to enforce Google’s policy, claiming that the action was consistent with the move to limit loan app firms’ invasion of customers’ privacy.

Google stated in its April 2023 policy updates that the new policy update would provide relief to loan app users in Nigeria and other countries who had grown accustomed to the crude loan retrieval methods used by the majority of loan apps.

Google said, “Policy preview (effective May 31, 2023): This article previews changes included in our April 2023 policy updates.
“We are updating our personal loans policy to state that apps aiming to provide or facilitate personal loans may not access user contacts or photos.

“We are introducing additional requirements for personal loan apps targeting users in Pakistan. Personal loan apps in Pakistan must submit country-specific licensing documentation to prove their ability to provide or facilitate personal loans.”

The Commission’s “Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending 2022” tries to regulate the digital lending space by requiring registration and approval for companies that want to operate in it.

Despite the fact that Google’s policy states that it does not “allow apps that promote personal loans that require repayment in full in 60 days or less from the date the loan is issued,” many loan apps in the country do not follow it, exposing many Nigerians to confidential data leaks.

According to the FCCPC, it has recently approved 173 digital lending applications to operate in the country. 119 of these received full approvals, while 54 received conditional approvals. This action became necessary after loan apps began harassing Nigerians by sending defamatory messages to their contacts, among other things.

Adeola Adenikinju, an MPC member, stated this in a statement at the most recent MPC meeting.

According to him, the banking industry assets rose by N14.36 trillion, while industry credit rose by N5.14 trillion in 2022.

“All measures of industry aggregates: assets, deposits, and credit rose year-on-year.

“Total assets of the banking industry grew by N14.36 trillion between the end of December 2021 and 2022.

“Similarly, industry credit increased by N5.14 trillion over the same period.

“In addition, total industry deposits rose by N7.08 trillion between end-December 2021 and 2022.

“In December 2022, a total of 130,854 new credits valued at N947.46 billion were granted to various customers”, he said.
The MPC member also disclosed that there was an increase in the maximum lending rate from 28.14 percent to 29.13 percent.

“Interest rate spread month-on-month widened to 23.42 percent in December 2022, as the maximum lending rate increased from 28.14 percent to 29.13 percent and average savings rate rose from 3.93 percent to 4.13 percent between November and December 2022, respectively,” Adenikinju added.

Only 49 of the digital lenders, however, received full approval, and the other 45 only received conditional approval.

Approved Money Lenders: Below is a list of the 49 Digital Money Lenders that have secured full approval from the FCCPC

1. Sycamore Integrated Solutions Limited 
2. Trade Depot  
3. Tajow Investment 
4. Blue Ridge Microfinance Bank Limited 
5. Grolatech Credit Limited 
6. Branch International Financial Services Limited 
7. P2vest Technology Limited 
8. Creditwave Finance Limited 
9. Keenest Tech Service Limited 
10. Fairmoney Micro Finance Bank 
11. Altracred Finance Investiment Limited 
12. Crevance Credit Limited 
13. Menacred Company Limited 
14. Afrowide Development Ltd 
15. Red Planet Nigeria Limited 
16. Afrofirst Mobile And Technology Company Limited 
17. Rankcapitals Limited 
18. Ibs Golden Investment Company Limited 
19. Lendvisery Services Limited 
20. Creditwave Finance Limited 
21. Renmoney Microfinance Bank Limited 
22. Swipebill Technologies Nigeria Limited. 
23. Hometown Fintech Limited 
24. Giasun Technology Nigeria Limited 
25. Be Resources Limited 
26. Rockit Lenders Nigeria Limited 
27. Pivo Technology Limied 
28. Yes Credit Company Limited 
29. Fubril Century Limited 
30. Irorun Technologies Limited 
31. Csense Limited 
32. Supreme Help Cooperative Society Limited 
33. Orcom And Orcom Bussiness Suport Limited 
34. Payhippo Limited. 
35. Easycheck Finance Investment Limited 
36. Quark Financial Nigeria Limited 
37. Edmond Solutions Company Limited 
38. Ted Rocket Limited 
39. Penaid Limited 
40. Arve Limited 
41. Dover Credit Limited 
42. Ragekay Global Investment Limited 
43. Maywood Lending Limited 
44. Linkpark Technology Nigeria Limited 
45. Mangnet Lending Limited 
46. Rubystar Global Limited 
47. Bestfin Nigeria Limited 
48. Fubri Century Company Limited 
49. Berly Spring Global Limited 

Conditional Approvals: The following companies have secured conditional approvals from the Commission, meaning that they still have some requirements to meet before they can get full approval.

1. Trippdbase Limited 
2. Blackcopper Service  
3. Owoafar Fintech Service 
4. Paylater Hub 
5. Windville Financial Nigeria Limited 
6. Afrofirst Mobile And Technology Company Limited 
7. Orcom And Orcom Business Support Limited 
8. Otp Internet Technology Ltd 
9. Red Harbor Fintech Limited 
10. Beryl Spring Global Limited 
11. Hometown Fintech Limited 
12. Ajax Lending Limited 
13. Raceova Nig. Limited 
14. Lantana Technology Limited 
15. The Platform Digital Network Limited 
16. Zippy Capital Limited 
17. Neo-link Technology Limited 
18. Tripobase Limited 
19. Bestfin Nigeria Limited 
20. Pocketfuel Finance Limited 
21. Lending Edge Limited 
22. Ted Rocket Limited 
23. Penaid Limited 
24. Altara Credit Limited 
25. New Credage Nigeria Limited 
26. Lendha Technologies Limited 
27. Doja Lemaire Global Limited 
28. Paydayhub Online Nigeria Limited 
29. Retail Booster Limited 
30. Finnew Fintech Limited 
31. Fezotech Nigeria Limited 
32. Orange Loan & Purple Credit Limited 
33. Citadele Capitals Limited 
34. Fewchore Finance Company Limited 
35. A1 Capital Solution Limited 
36. One Payout Limited 
37. Linkpark Technology Nigeria Limited 
38. Lidya Global Limited 
39. Phoenix Payment Solutions Limited 
40. Red Planet Nigeria Limited 
41. Kwaba International Limited. 
42. Maywood Lending Limited. 
43. Princeps Credit System Limited 
44. Linkpark Technology Nigeria Limited 
45. Finpadi Technologies Limited