Digital lenders fret over FCCPC’s new interest rate control rules
Agency Report
Digital lenders in Nigeria have expressed worry over the Federal Competition and Consumer Protection Commission’s (FCCPC) new regulation that empowers the agency to monitor and possibly control interest rates charged by loan apps.
The provision is contained in the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025, released to all licensed operators last week.
According to the FCCPC, the aim is to ensure fairness in the rapidly growing digital lending industry, which has long been criticized for exploitative charges.
The directive has, however, unsettled operators, who argue that pricing in digital lending cannot be standardized because it reflects the high risks and cost of funds in the sector.
Speaking on behalf of the industry, the President of the Money Lenders Association (MLA), Mr. Gbemi Adelekan, warned that regulatory interference in pricing could disrupt the market.
“This is a difficult area because for us, the interest rate is determined by the credit risk, market risk, and cost of funds. Unless the authorities are planning to give us funds to operate and bring more people into the ecosystem, I don’t know how this will work,” Adelekan said.
He explained that most loan apps do not take deposits like banks and therefore borrow funds from commercial institutions at high costs, which are then passed on to borrowers.
Complaints about exorbitant rates have been consistent among Nigerian borrowers. In one recent case, a digital lender offered N2.5 million to a customer with a repayment schedule of N268,230 monthly for 24 months—amounting to N6.4 million in total.
This meant the customer would pay N3.9 million in interest alone, representing an annual rate of nearly 200 per cent.
The FCCPC warned that lenders who violate the new rules risk severe sanctions. These include suspension of operations, delisting from app stores, or outright revocation of approval.
Specifically, individuals found guilty could be fined up to N50 million, while companies face penalties of N100 million or 1 per cent of their annual turnover, whichever is higher.
