The Federal Competition and Consumer Protection Commission (FCCPC) has rolled out a new regulatory regime that could finally rein in the widespread harassment of Nigerian borrowers by digital lending platforms.
The regulations, officially gazetted as the Digital, Electronic, Online or Non-Traditional Consumer Lending (DEON) Regulation, 2025, took effect on July 21 and are poised to reshape the fast-growing but controversial digital lending industry.
EDITOR’S PICKS
For years, many Nigerians who turned to online lenders for quick loans have faced an ordeal when they default — or even come close to defaulting — on repayment. These lenders have been widely accused of using aggressive and unethical recovery tactics, including spamming borrowers’ contacts with defamatory messages, issuing public threats, and sometimes disclosing private financial information without consent.
A Long-Awaited Response to Consumer Abuse
Tunji Bello, FCCPC’s Executive Vice-Chairman and Chief Executive Officer, said the new regime was designed to end these abusive practices and restore dignity to consumers.
“For too long, Nigerians have endured harassment, data breaches, and unethical practices by unregulated digital lenders,” Bello said at a press briefing in Abuja. “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. No consumer should be harassed, defamed, or lured into unsustainable debt under the guise of digital lending.”
The DEON regulation serves as a comprehensive framework for the registration, transparency, and ethical conduct of all providers of unsecured consumer credit offered through electronic and non-traditional channels.
Key Provisions of the DEON Regulation
One of the most significant aspects of the new regulation is its strict stance on harassment and privacy violations. Lenders can no longer contact borrowers’ family, friends, or employers with threats or defamatory messages. The rules specifically address the common practice of sending mass messages to borrowers’ contact lists — a tactic that has been widely condemned as humiliating and illegal.
Other highlights of the regulation include:
- Mandatory Registration: All digital lenders must register with the FCCPC within 90 days of the regulation’s commencement.
- Clear and Accessible Loan Terms: Lenders must present borrowers with transparent, easy-to-understand loan terms before disbursement.
- Ban on Pre-Authorised Lending: Digital lenders are prohibited from disbursing loans without the borrower’s explicit consent.
- Data Privacy Safeguards: The regulation establishes strict standards for how lenders collect, store, and use borrowers’ personal data.
- Joint Registration Requirements: Partnerships between lenders and fintechs must be registered jointly, and at least one locally owned provider must be involved in airtime and data lending.
- FCCPC Approval for Market Control: Monopoly or dominance agreements require prior approval from the commission.
Stiff Sanctions for Violations
To ensure compliance, the FCCPC has provided for substantial penalties. Non-compliant operators could face fines of up to ₦100 million or 1% of their turnover, whichever is higher. In severe cases, company directors may also be disqualified from holding office for up to five years.
Consumers have also been given a clear channel for redress. The commission encourages borrowers to report unregistered lenders, exploitative interest rates, or privacy violations through its complaints portal: [email protected].
Implications for Borrowers and the Industry
This regulatory move is expected to bring order to Nigeria’s digital lending ecosystem, which has exploded in popularity over the last five years due to rising living costs and limited access to formal credit. For borrowers, the DEON regulation means greater protection from harassment, more transparent loan terms, and safer handling of their personal data. For lenders, it signals an era of tighter compliance requirements, but also a more sustainable and credible operating environment.
FURTHER READING
As the 90-day registration window counts down, all eyes will be on how many digital lenders come forward to comply and how swiftly the FCCPC moves against those who fail to meet the new standards.
Philip Ibitoye is a Special Correspondent with EKO HOT BLOG. Click here to find daily analysis and critical insight on trending issues in Lagos and other parts of Nigeria.
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