Regulatory AlertsNigeria: lending & credit regulation
RegulatedLending via CBN OFI licenses; SEC regulates credit enhancement; strict AML/CRMS compliance
- Lead regulator
- Central Bank of Nigeria (CBN)
- Core law
- Banks and Other Financial Institutions Act (BOFIA) 2020
- Entry capital
- NGN 100m (Unit MFB)
- Approval timeline
- 6-12 months for OFI license
- Customer assets
- Segregated in licensed bank accounts
- Data protection
- NDPA 2023 · NDPC
- Sandbox
- No
Lending is strictly regulated under BOFIA 2020. The CBN licenses Microfinance Banks (Unit, State, or National) and Finance Companies as the primary vehicles for consumer and SME credit. Unlicensed lending is prohibited. The SEC regulates credit enhancement providers. Strict adherence to the Credit Risk Management System (CRMS) and AML/CFT guidelines is mandatory for all licensed entities.
Which licence do you need?
| Your activity | Requirement | Capital | Timeline | Authority |
|---|---|---|---|---|
| Consumer lending | LicenceMicrofinance Bank (Unit/State) or Finance Company[1][2] Requires CBN OFI license; unlicensed lending is illegal. | NGN 100m (Unit MFB) | 6-12 months | CBN |
| SME / commercial lending | LicenceMicrofinance Bank (State/National) or Finance Company[1][2] Higher capital required for State/National MFBs or Finance Companies. | NGN 500m (State MFB) | 6-12 months | CBN |
| Microfinance | LicenceMicrofinance Bank (Unit/State/National)[1][2] Tiered licensing based on capital and geographic scope. | NGN 100m (Unit MFB) | 6-12 months | CBN |
| Buy-now-pay-later | LicenceMicrofinance Bank or Finance Company[1] Treated as consumer credit; requires OFI license. | NGN 100m (Unit MFB) | 6-12 months | CBN |
| P2P lending platform | LicenceMicrofinance Bank or Finance Company[1] No specific P2P license; operates under general OFI framework. | NGN 100m (Unit MFB) | 6-12 months | CBN |
| Credit bureau / scoring | Uncertain[3]verify with regulator CRMS mandatory for lenders; standalone scoring unregulated. | — | — | — |
| Debt collection | Uncertainverify with regulator No specific license; subject to general business and AML laws. | — | — | — |
New — what changed recently
- 2024-09MPR Increase to 27.25% — CBN raised MPR twice in Q3 2024 to combat inflation, tightening credit conditions.[4]
- 2024-06LDR Reduction to 50% — CBN reduced Loan-to-Deposit Ratio target to 50% to manage liquidity and inflation.[2]
- 2024-04CRMS Credit Printout Guide — CBN issued additional guide on credit printouts to ensure uniformity in credit information.[5]
Market-entry checklist
- 1Secure CBN OFI LicenseApply for Microfinance Bank or Finance Company license with minimum NGN 100m capital.
- 2Register with NFIUComply with AML/CFT guidelines and register as a reporting entity.
- 3Enroll in CRMSConnect to the Credit Risk Management System for mandatory credit reporting.
- 4Establish Data ProtectionRegister with NDPC and comply with NDPA 2023 for customer data handling.
- 5Open Corporate Bank AccountMaintain segregated customer funds in a licensed Deposit Money Bank.
Sources
- NDIC Quarterly Vol 39 No 1&2 2024 – Financial Performance and Condition of Deposit Money Banks in the First and Second Quarter of 2024 · 2025-12-09
- NDIC Quarterly Vol 39 No 1&2 2024 – Review of Macroeconomic Developments in the Second Quarter of 2024 · 2025-12-09
- Re: Enrollment of Other Financial Institutions (OFIs) on the Credit Risk Management System (CRMS) · 2022-05-24
- NDIC Quarterly Vol 39 No 3&4 2024 – Review of Macroeconomic Developments in the Third Quarter of 2024 · 2025-12-09
- ADDITIONAL GUIDE TO THE PROVISION OF INFORMATION ON CREDIT PRINTOUT · 2025-06-13