Starting Monday, January 5, 2026, any digital lender or loan app operating without full FCCPC approval under the new DEON regulations will face severe sanctions, including:
- Up to N100 million or 1% of the previous year’s turnover for companies
- Up to N50 million for individuals
- Disqualification or suspension of directors for up to five years
These penalties stem from the Digital, Electronic, Online, and Non-Traditional Consumer Lending (DEON) Regulations 2025, which took effect on July 21, 2025.
Who Must Comply?
The regulations apply to all digital, online, and non-traditional lenders offering services such as:
- Unsecured cash loans
- Airtime or data loans
- Cashback or barter-based loans
- Digital lending by fintechs, mobile money operators (e.g., Airtel SmartCash), agritech platforms, and cross-state loan vendors
Even if the business holds another regulatory license, FCCPC approval is still mandatory.
While licensed Microfinance Banks (MFBs) are exempt, they must apply for a formal waiver. Meanwhile, all 399 fully approved and 40 conditionally approved lenders from the interim phase must transition to full approval before the deadline.
Step 1: Mandatory Registration and Documentation
To begin the approval process:
Submit Required Forms
- Complete DEON Consumer Lending Form 001
- Complete Declaration Form 002
Pay Mandatory Fees
- N100,000 non-refundable application fee
- N1,000,000 approval fee (covers up to two apps)
Submit All Service Agreements
All SLAs with third-party service providers must be submitted for FCCPC review and approval, including existing and newly executed contracts.
Restrict App Permissions
All loan apps must not request or access:
- Contact lists
- Call logs
- Photos or gallery files
Such access is now a compliance violation.
Step 2: Operational and Ethical Overhaul
The FCCPC requires a full operational compliance update.
Data Protection Compliance
- Submit a Compliance Audit Report
- Submit a Data Protection Impact Assessment (DPIA)
Both must be issued by a registered Data Protection Compliance Organisation (DPCO).
Transparent Pricing
Apps and marketing materials must disclose:
- Interest rates
- All fees
- Penalties
Hidden or undisclosed charges are illegal.
Ethical Lending Practices
- No automatic or pre-authorized lending
- Clear credit assessment process
- Consumers must opt in to every loan voluntarily
Ethical Debt Collection
Strictly prohibited:
- Harassment
- Public shaming
- Contacting third parties for debt recovery
Complaint Resolution Mechanism
Every lender must:
- Implement a documented feedback system
- Resolve all complaints within 24–48 hours
Step 3: Sustained Reporting and Monitoring
✓ Biannual Reports
Every six months, lenders must submit:
- Loan transaction summaries
- Interest rates charged
- Complaint logs and resolution data
✓ Annual Returns
By March 31 each year, companies must file:
- Full annual returns
- Lending activity reports
- Audited financial statements
✓ Record Retention
All loan records must be kept for at least five years and submitted to the FCCPC within 48 hours when requested.
✓ Validity and Renewal
Initial approval is valid for one year, after which renewals are required every 36 months, along with annual levies.
Key Documents Required for Full FCCPC Approval
Applicants must provide the following:
- Filled DEON Consumer Lending Forms (Form 001 & Form 002)
- Certified Certificate of Incorporation
- Terms of Use, Privacy Policy, and Code of Conduct
- NDPC Data Protection Documents:
- Audit Trust Mark
- Compliance Audit Report
- DPIA from a DPCO
- Proof of N100,000 application fee payment
- Details of all operational bank accounts
- Proposed interest rate regime and calculation formulas
- List of up to five apps (active or intended)
- All mandatory service agreements with operational partners
- Evidence of a complaint and feedback system
- Tax payment records or waivers
Conclusion
With the January 5, 2026 deadline fast approaching, digital lenders must begin the FCCPC approval process immediately to avoid heavy penalties and business disruption. Full compliance under the DEON 2025 Regulations is now the minimum standard for operating legally in Nigeria’s digital lending ecosystem.
