In a country where traditional banks often make credit difficult to access, millions of Nigerians now rely on mobile loan apps for urgent cash. For young graduates, small business owners, and families trying to cover daily needs, these apps promise instant loans with little paperwork, no collateral, no guarantor, just a few taps on a smartphone.

Yet behind that convenience lies a troubling reality: harassment, breaches of privacy, and exploitative repayment tactics that have left many borrowers traumatised.

For years, users have complained of aggressive debt recovery methods that included threats, public shaming, and harassment of relatives and friends whose phone numbers were pulled without permission. Some defaulters were even branded as criminals or fraudsters in mass text messages, tactics that not only break privacy laws but also cause lasting emotional and reputational damage.

In response, the Federal Competition and Consumer Protection Commission (FCCPC) has rolled out the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations (DEON Consumer Lending Regulation) 2025.

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The rules, anchored on Sections 17, 18, and 163 of the FCCPC Act, are designed to curb abuse, demand transparency, safeguard data, and enforce ethical loan recovery practices.

Announcing the gazetting of the regulations in Abuja, the FCCPC’s Executive Vice Chairman, Tunji Bello, said Nigerians had “endured harassment, data breaches, and unethical practices for too long.” He stressed that innovation must not override dignity and rights, warning that offenders could face penalties of up to ₦100 million or 1% of turnover, with directors banned from business for as long as five years.

“These regulations provide the legal tools to hold violators accountable and promote responsible digital finance,” Bello said. “No consumer should be harassed, defamed, or lured into unsustainable debt under the guise of digital lending.”

How big is Nigeria’s digital lending market?

The scale of the industry shows why regulation became unavoidable. Between January 2023 and January 2024 alone, Nigerians borrowed an estimated ₦1.22 trillion via loan apps, pushing personal loan volumes to more than ₦3 trillion. By late 2024, more than 300 licensed digital lenders were active, compared with fewer than 200 the year before, and by mid-2025, the number had surpassed 425.

Industry estimates suggest that more than 40 percent of active mobile phone users in Nigeria have downloaded or used at least one loan app in the past two years, placing the country among the fastest-growing digital credit markets in Africa.

This soaring demand reflects the struggle for accessible credit in a system where bank loans remain out of reach for many households and small businesses. But it has also left borrowers vulnerable to abuse, with regulators scrambling to catch up.

Have regulators gone far enough?

While the new rules are a bold step forward, questions linger about how effectively they will be enforced and whether tougher protections are still required.

The regulations ban pre-authorised lending, enforce transparency, and impose fines of up to ₦100 million, but some consumer advocates warn that this may not be enough in a market worth trillions of naira, where the profits of predatory behaviour can dwarf any penalties.

Critics argue that stronger safeguards, such as capping interest rates, requiring affordability checks, and setting clear redress mechanisms, may be needed to shield borrowers fully. Without strict monitoring and swift enforcement, unethical lenders could still find ways to operate unchecked, undermining the FCCPC’s goals.

For now, the Commission is encouraging borrowers to report unlicensed operators, unfair rates, and privacy breaches through its complaint portal, lenderstaskforce@fccpc.gov.ng. Whether this regulatory push restores trust in Nigeria’s digital lending industry, or only scratches the surface, remains to be seen.

Meiza Nigeria