The lending landscape in Nigeria continues to evolve rapidly, with authorities approving 18 new loan companies to operate in the country. This latest development brings the total number of licensed loan app companies to 284, according to the Federal Competition and Consumer Protection Commission (FCCPC) and the Central Bank of Nigeria (CBN).
As of March 2024, Nigeria had 266 approved loan companies. However, the updated list released in May reveals an additional 18 companies have been granted the green light to offer digital lending services. The FCCPC’s database now consists of 232 companies with full approval, 41 with conditional approval, and 11 licensed by the CBN.
The proliferation of loan apps has been a double-edged sword for Nigerian consumers. While it has increased access to credit, it has also given rise to predatory practices by some unscrupulous lenders. Experts have raised concerns about the FCCPC’s ability to regulate the growing number of digital lenders effectively.
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Adamu Abdullahi, the Acting Executive Vice Chairman of the FCCPC, acknowledged the challenges posed by illegal loan apps thriving through the use of Payment Service Solution Provider (PSSP) wallets. In an interview with the News Agency of Nigeria (NAN), he expressed hope that the federal government’s consumer credit scheme, which earmarked ₦100 billion in the 2024 budget for collateral-free soft loans, would reduce the reliance on unregistered loan applications.
The first phase of the consumer credit scheme, launched in April 2024, targeted civil servants, with the Nigeria Consumer Credit Corporation (CREDICORP) opening a portal for Nigerians to express interest in obtaining consumer credit.
As the lending landscape continues to evolve, striking a balance between promoting financial inclusion and protecting consumer rights remains a critical challenge for regulators in Nigeria.
