REGULATORY UPDATE: 2025 DIGITAL, ELECTRONIC, ONLINE, OR NON-TRADITIONAL CONSUMER LENDING GUIDELINES – NAVIGATING COMPLIANCE

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BY SEUN TIMI-KOLEOLU AND MARK IMONITIE

Introduction

In furtherance of its regulatory powers, the Federal Competition and Consumer Protection Commission (the “Commission”) on November 18, 2025 issued the Digital, Electronic, Online, or Non-Traditional Consumer Lending Guidelines, 2025 (the “Guidelines”). The Guidelines aim to contextualize, clarify, and enhance the provisions outlined in the Digital, Electronic, Online, or Non-traditional Consumer Lending Regulations 2025 (the “Regulations”) issued by the Commission in July 2025.

The Guidelines which became effective on November 18, 2025, introduce key provisions affecting digital lenders—such as approval of lending applications, transition for previous license holders, and pilot lending programme.

In this newsletter, we examine some of the key provisions introduced by the Guidelines, which improves on the provisions of the Regulations as discussed in our newsletter  earlier written.

  1. Scope of the Guidelines

The Guidelines apply to all individuals, entities, or institutions involved in providing, facilitating, or managing digital, electronic, online, or other non-traditional consumer lending services within the Federal Republic of Nigeria. This includes those operating directly or through digital platforms, agents, or other intermediaries, as well as Nigerian citizens residing both inside and outside Nigeria.

Furthermore, the Guidelines extend to cross-border digital consumer lending services offered to consumers in Nigeria, as well as corporate bodies or government agencies engaged in commercial lending or holding controlling interests in such activities.

However, the Guidelines do not apply to:

  1. financial institutions duly licensed and regulated by the Central Bank of Nigeria;
  2. lending arrangements between employers and employees conducted strictly under an employment relationship; and
  3. cooperative societies that are duly registered, licensed, and operating in accordance with relevant laws.
  1. Approval of Lending Applications

Prior to the Guidelines, the Commission was not obligated to review or approve the mobile or web applications used by lenders in delivering their lending services.

However, under the Guidelines, in addition to the registration requirement for digital lenders outlined in paragraph 15 of the Regulations, applicants are now required to submit the mobile or web application intended for lending services to the Commission for approval.

The Guidelines further require intending digital lenders to provide:

  1. evidence of compliance with relevant standards for mobile applications, data messaging, information security, data quality, and secure authentication, as set by the International Organization for Standardization (ISO);
  2. proof of ownership of intellectual property rights in the lending application or a valid, active license to use it;
  3. confirmation that the lending application complies with the Nigeria Data Protection Act, 2023, and other applicable laws and guidelines of the Nigeria Data Protection Commission; and
  4. any additional information or documentation the Commission may request.

If an applicant fails to disclose any lending application used or intended for consumer lending services, the Commission may refuse approval. If approval was already granted before this nondisclosure is discovered, the Commission may revoke approval or impose a penalty on such applicant. The Commission may also order any application marketplace or digital platform to delist such lending application for violating the Regulations or Guidelines.

The aim of this requirement is to ensure that digital lending platforms meet regulatory standards for security, intellectual property, and data protection before approval, thereby safeguarding consumer interests and maintaining compliance with relevant laws.

Furthermore, the non-refundable approval fee of One Million Naira (N1,000,000) as provided under the Regulation, shall entitle an applicant to register up to two (2) lending applications. Where an applicant seeks to register additional lending applications such that the total number exceeds two (2), the applicant shall pay an additional fee of Five Hundred Thousand Naira (N500,000) per application. In any case the maximum registrable number of applications shall not exceed five (5).

  1. Transition for Previous License Holders

The Guidelines establish the requirements for transitions by digital lenders who were registered under the Digital Lending Guidelines, 2022.  It provides that entities registered with the Commission under the 2022 Guidelines and before the 2025 Regulations came into effect, will be regarded as Deemed Licensees.

It is understood that such Deemed Licensees hold a deemed license to offer consumer lending services until June 30, 2026, and Deemed Licensees wishing to continue providing consumer lending services beyond this date must apply to the Commission for approval at least sixty (60) days before the expiration.

Under the Guidelines, a Deemed Licensee is not required to obtain immediate approval from the Commission to provide Consumer Lending Services pursuant to the Regulations. Nevertheless, Deemed Licensees must submit the following to the Commission:

  1. a schedule of loan books and transactions;
  2. the financial statements for the previous financial year;
  3. details of the lending applications used by the Deemed Licensee for digital lending services;
  4. evidence of compliance with annual returns filing as required by the Companies and Allied Matters Act, relevant sector-specific laws and regulations; and
  5. any other information the Commission may request.

If the Commission determines that there has been a significant change since the date of registration—such as changes in the Deemed Licensee’s details, ownership structure, or business nature—the Deemed Licensee will be required to formally apply for approval under the Regulations.

  1. Pilot Programme

The Guidelines introduced new provisions for entities seeking to provide consumer lending services under a Pilot Programme. The Pilot Programme is meant to cater for entities who wish to test the digital lending market prior to full registration, and is a proactive step towards meeting FCCPC’s comprehensive regulatory expectations.

Under the Guidelines, a Pilot Programme means a limited, trial implementation of consumer lending services for the purpose of evaluating performance, functionality, and feasibility in a controlled environment, prior to a full-scale commercial deployment or implementation.

To apply under the Pilot Programme, amongst other information requested by the Commission, an applicant is required to submit: (i) a board resolution approving application and participation; (ii) Certificate of Incorporation; (iii) company profile, organogram, and contact details; (iv) MEMART and updated Status Report; (v) CVs of directors and management staff; and (vi) AML/CTF policy.

The Commission may approve a Pilot Programme if the consumer lending exposure does not exceed One Million Naira (N1,000,000) and onboards less than one hundred (100) unique customers. Other considerations by the Commission include: the sufficiency of resources and expertise to manage risks and losses; the level of innovation and likelihood to enhance accessibility, efficiency, security, quality, or fill market gaps; and the viability of business plan for post-pilot deployment.

The Pilot Programme is valid for a period of ninety (90) days, and is renewable once for an additional period of ninety (90) days upon request. Applicants intending to obtain a full license must apply in writing at least fourteen (14) days before expiration of the Pilot Programme and the Commission may grant full license based on the entity’s performance during the Pilot Programme.

 

Conclusion

The Guidelines represent a significant step forward by the Commission in enhancing the regulatory framework for digital lending in Nigeria. Implementation of the Guidelines would ensure operational integrity, strengthen consumer protection, foster transparency and accountability within the digital lending ecosystem, and support the sustainable growth of fintech innovations in Nigeria.

THE LEGAL AND REGULATORY FRAMEWORK FOR PRIVATE DEBT FUNDS IN NIGERIA

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THE LEGAL AND REGULATORY FRAMEWORK FOR PRIVATE DEBT FUNDS IN NIGERIA

 

BY ADERONKE ALEX-ADEDIPE AND PROMISE ITAH

Introduction

Many small- and mid-sized businesses struggle to access traditional bank financing due to strict lending requirements, high collateral demands, and limited credit availability. At the same time, investors seeking stable, predictable returns have few reliable options in the public markets.

Private debt, or private credit, helps bridge this gap by enabling non-bank lenders to provide capital directly to businesses, offering flexible terms for borrowers and steady interest income for investors. Globally, private credit has become a rapidly growing alternative asset class, with the market valued at USD 1.5 trillion in 2024 and projected to reach USD 2.6 trillion by 2029.

To scale this model, private debt funds have emerged. In Nigeria, the launch of locally denominated funds, including the pioneer FCMB-TLG Private Debt Fund Series 1, demonstrates growing investor interest and a regulatory environment that increasingly supports private debt.

In this newsletter, we highlight the legal and regulatory frameworks for private debt funds in Nigeria.

  1. What are the Legal Frameworks for Private Debt Funds in Nigeria?

Private debt funds are pooled investment vehicles that raise capital from institutional and high-net-worth investors to lend directly to businesses. Private debt funds in Nigeria typically operate through collective investment schemes (CIS). structured as a trust and  incorporated fund vehicle (or in the case of private, unregulated funds as limited partnerships and unincorporated joint ventures).

These fund structures as mentioned above, operate within the legal scope of the Investment and Securities Act (ISA) 2025, particularly Sections 150–197 (the Rules on Collective Investment Schemes, and other subsidiary rules and regulations issued by the Securities and Exchange Commission (SEC)), which govern collective and alternative investment schemes. Under this framework, the following participants play essential roles:

  • Fund Manager: The fund manager is the central operator of a private debt fund, responsible for developing and executing the fund’s investment strategy, originating and structuring loan transactions, and overseeing the performance of the portfolio companies. In addition to managing investments, the fund manager acts as the fund’s sponsor, submitting the registration application to the SEC and ensuring full compliance with all regulatory requirements under the ISA 2025 and the relevant SEC rules.
  • Trustees: The trustees are fiduciaries acting on behalf of investors. They monitor the fund’s operations, enforce compliance with governing documents and SEC rules, and safeguard investor interests by providing independent oversight.
  • Custodian: The custodian is charged with holding the fund’s assets — whether cash, securities, or collateral pledged by borrowers — in safe custody. Custodians ensure segregation of assets and prevent misuse, thereby protecting investor capital.
  • Registrar: The registrar maintains accurate records of investors, processes subscriptions and redemptions, and facilitates communication with unit holders. This role ensures transparency and proper documentation of investor rights.
  • Auditors: The auditors independently review and certify the fund’s annual accounts. Their work provides credibility to financial statements and reinforces investor confidence in the fund’s governance.
  • Investment Committee: The investment committee oversees the fund’s investment decisions, ensuring that transactions align with the fund’s objectives, risk management policies, and overall strategy. It balances the discretion of the manager with structured oversight.
  • Legal Advisers: The legal advisers draft and review the fund’s documentation — including the trust deed, prospectus, and partnership agreements — and ensure compliance with the Investments and Securities Act and SEC rules.
  • Investors: The investors, whether institutional or high-net-worth individuals, provide the capital that fuels the fund. In return, they receive fixed-income returns through interest payments and rely on the governance framework and disclosures mandated by the SEC to protect their investments.

All of the participants listed above, other than the investors, must be registered with the SEC as capital market operators.

 

  1. What are the Regulatory Requirements for Establishing and Operating a Private Debt Fund in Nigeria?

To establish and operate a private debt fund, the fund must obtain registration and authorization, or a no-objection certificate, from the SEC and comply with all ongoing regulatory requirements under the ISA 2025 and the relevant SEC rules.

  1. What are the Registration Requirements for Private Debt Funds in Nigeria?
    To obtain authorization to establish and operate a private debt fund, the following must be submitted to the SEC:
    • Application to the SEC using relevant SEC Forms
    • Fund Information Memorandum/Prospectus (two copies)
    • Trust Deed or Limited Partnership Agreement (two copies)
    • Certificate of Incorporation of the Fund Manager
    • Sworn undertaking to file quarterly returns
    • Evidence of payment of authorization fees
    • Notarized Certificate of Compliance
    • Full and consistent disclosure across all documents

  2. What are the Ongoing Compliance Requirements for Private Debt Funds in Nigeria?
    Private debt funds in Nigeria are subject to ongoing compliance requirements under the ISA) 2025 and the SEC rules governing collective investment schemes and alternative investment vehicles. These obligations are designed to ensure transparency, investor protection, and market integrity. Some key regulatory obligations include:
    • Maintenance of annual audited financial statements
    • Regular investor meetings
    • Quarterly reporting to the SEC
    • Periodic independent valuation of fund assets
    • Establishment and maintenance of an investment committee
    • Filing of registration documents and offering circulars
    • Compliance with applicable SEC rules and regulations.

     

    Conclusion

    Given the challenges businesses face in accessing debt financing from traditional lenders, private debt funds are well-positioned to transform Nigeria’s financing landscape. The ISA 2025 and SEC rules provide a solid legal and regulatory framework for fund establishment, governance, investor protection, and market transparency. With growing private capital activity and the successful launch of Nigeria’s first local-currency private debt fund, the sector is positioned for substantial growth and increasing impact on the economy.

REGULATORY FRAMEWORK AND INVESTMENT OPPORTUNITIES FOR CLEAN ENERGY PROJECTS IN NIGERIA

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BY SEUN TIMI-KOLEOLU AND OMODELE FATODU

As the 30th United Nations Climate Change Conference (COP30) convenes in Belém, Brazil, it presents an opportunity to examine Nigeria’s legal and policy measures relevant to clean-energy and climate-aligned activities. Key developments include the approval of the National Carbon Market Framework, the establishment of the Climate Change Fund under the Climate Change Act 2021 (“CCA”) and growing regulatory attention on renewable-energy and waste-to-energy projects.

For investors, and companies, these developments affect project structuring, licensing, environmental compliance, and participation in carbon markets. Understanding the legal and regulatory landscape is essential to identify opportunities, ensure compliance, and mitigate risks in Nigeria’s evolving clean-energy sector.

KEY DEVELOPMENTS AHEAD OF COP30

National Carbon Market Framework: Approved in October 2025, this framework provides formal rules for the registration, issuance, and verification of carbon credits. It establishes a national carbon registry, mandates monitoring, reporting, and verification (MRV) protocols, and enables benefit‑sharing mechanisms for community and ecosystem-based projects. This framework lays the foundation for Nigeria’s structured participation in carbon markets.

Climate Change Fund (the “Fund”): Established under the CCA, the Fund channels both public and private climate finance into mitigation and adaptation initiatives. The Fund is expected to support clean-energy projects, ecosystem restoration, and other climate-aligned interventions by leveraging grants, public contributions, and potential carbon-related revenue. In November 2025, at COP30, the Vice-President, Senator Kashim Shettima, stated that through the National Carbon Market Framework and the Fund, the government aims to mobilise up to $3 billion annually in climate finance. This will be reinvested in projects such as community-led reforestation, blue carbon projects, and sustainable agriculture.

National Council on Climate Change (NCCC): Created under the CCA, the NCCC coordinates Nigeria’s climate strategy, oversees the Climate Change Fund, and sets national priorities for mitigation and adaptation. It plays a central role in approving projects eligible for carbon credit registration and ensuring alignment with national climate‑change objectives.

Nature-Based Climate Solutions: Under S.27 of the CCA, the NCCC is required to promote and adopt nature-based solutions to reducing greenhouse gas emissions and mitigating climate change issues in Nigeria.  In 2025, the NCCC adopted “Amplifying Nature-Based Climate Solutions” as its theme for the year, with a technical site visit to mangrove forests in the Niger Delta to assess restoration and conservation opportunities. The Climate Change Act also provides for the establishment of a REDD+ registry for forest carbon projects.

Clean-Energy Deployment: Nigeria’s Renewable Energy Master Plan establishes targets for solar, wind, biomass, and other renewable technologies, aiming to significantly increase the share of renewables in electricity consumption by 2025. In addition, the Revised National Energy Policy and the Energy Commission of Nigeria encourage the deployment of biomass and waste-to-energy technologies as part of a circular economy strategy. These frameworks collectively promote diversified renewable-energy development beyond traditional solar and wind, encompassing distributed generation, biomass, and waste-to-energy solutions.

REGULATORY AND LEGAL CONSIDERATIONS FOR CLEAN-ENERGY PROJECTS

As Nigeria’s regulatory landscape for clean-energy and climate-aligned projects becomes more increasingly structured, and understanding the applicable frameworks is critical for project development and investment. Key considerations include:

The Nigerian Electricity Regulatory Commission (NERC): The Electricity Act 2023 clarifies licensing obligations for electricity generation, including waste-to-energy and other renewable-energy facilities. Developers are required to obtain approvals at both federal and state levels, particularly when projects involve grid interconnection or the sale of electricity to industrial off takers.  The NERC regulates licensing, metering, data reporting, and tariff approval. Compliance with NERC regulations is increasingly a prerequisite for financing, especially when projects involve power sales to utilities or industrial clients.

Environmental & Social Compliance: Waste-to-energy projects and other energy generation projects can have significant environmental and community impacts. Developers are required to conduct Environmental Impact Assessments (EIAs) and prepare Environmental and Social Management Plans (ESMPs), ensuring alignment with standards such as the IFC Performance Standards.

Climate Legislation and Carbon Markets: Under the CCA, corporate actors in the clean-energy space must consider national climate‑risk strategies and long‑term carbon planning. Projects that feed into, or derive benefit from, Nigeria’s carbon-market framework must align with the planning and reporting processes overseen by the NCCC. These include securing a No‑Objection Certificate from the NCCC before carbon credits can be issued or transferred and registering projects in the national carbon registry. Developers must implement benefit-sharing mechanisms, clarify carbon ownership rights, and include dispute-resolution processes in contracts. Failure to comply can result in credit revocation or financial penalties.

Data Protection and Monitoring: Projects that use digital platforms or remote monitoring fall under the Nigeria Data Protection Act 2023 (“NDPA”). Under the NDPA, Companies must implement safeguards for operational and personal data, including privacy-by-design, cross-border transfer compliance, and cybersecurity measures.

OPPORTUNITIES IN NIGERIA’S CLEAN-ENERGY TRANSITION

Nigeria’s regulatory and policy shifts open up several opportunities in the clean-energy space. Waste-to-energy, solar, and other distributed renewable solutions are gaining traction as commercially viable options. Waste-to-energy projects address multiple challenges simultaneously by supporting electricity generation, improving urban waste management, and contributing to emissions reduction.

By converting waste into electricity and generating carbon credits, such projects address pressing urban challenges while generating multiple revenue streams. Waste-to-energy initiatives contribute to strong ESG outcomes by reducing environmental impacts, improving urban waste management, and contributing to emissions reduction. Integrating regulatory compliance and carbon-market participation into such operations strengthens project viability and investment appeal, particularly when attracting socially responsible investors, as such projects promote ecological integrity, transparency, and alignment with national climate goals.

Key avenues for creating value include:

Diversified Revenue from Waste-to-energy: Companies can generate revenue by selling electricity to industrial off takers or distribution companies, receiving tipping fees for processing waste, and generate additional revenue from the sale of carbon credits.

Carbon Projects and Finance: Companies can generate revenue by registering eligible projects and issuing carbon credits that can be sold once verified. Access to concessional finance or blended funding can further improve project returns.

Strategic Partnerships: Companies can secure steady income by collaborating with government authorities on waste management, renewable energy, or nature-based initiatives.

Solar and Distributed Renewables: Companies can generate revenue from Power Purchase Agreements (PPA) with commercial and industrial users, solar farms, rooftop and off-grid generation, and embedded generation solutions.

CONCLUSION

COP30 provides a backdrop to Nigeria’s evolving regulatory and policy framework for clean-energy and climate-aligned projects. Understanding the legal and regulatory environment is essential for investors, companies, and legal advisers to structure projects effectively, comply with applicable laws, and capitalise on emerging opportunities.

 

Decoding the Insurance Reform Act: New Rules, New Realities for Intermediaries

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BY ADERONKE ALEX-ADEDIPE AND HILLARY OKOROTIE

Introduction

On August 5, 2025, the Nigerian Insurance Industry Reform Act (the “Act”) was signed into law, reforming the regulatory framework for insurance companies and other entities providing services within the insurance industry. For intermediaries such as insurance agents, brokers, loss adjusters and other stakeholders the new Act seeks to streamline and reform their operational obligations as well as their licensing requirements.

In this newsletter we highlight some key provisions of the Act as they relate to insurance intermediaries, their licensing requirements, penalties for noncompliance and other notable provisions of the Act.

Licensing Requirements for Insurance Intermediaries and Penalties for Noncompliance

Insurance Agents

Insurance agents are typically licensed to market, negotiate, or sell insurance products on behalf of an insurance company.

The Act provides that individuals or entities who intend to carry on business as insurance agents must first be licensed by the National Insurance Commission (the “Commission”). Where an individual is seeking to be licensed by the Commission, the Act requires that such an individual must possess a certificate of proficiency issued by the Chartered Insurance Institute of Nigeria. Where the agent is a company, one of its principal officers must possess the certificate of proficiency, as well as 10 years experience working in an underwriting company.

In addition, the applicant must not have been convicted of an offence involving fraud or dishonesty. Upon approval of the application by the Commission, the licence shall be due for renewal after a period of 3 years. Previously, agents were required to renew their licenses every year.

Individuals or entities operating without a license are liable to imprisonment for a term of 6 months or a fine of N500,000 or both. The entity or individual may also be required to issue a refund of any payment collected for services rendered while acting as an insurance agent. For licensed insurance companies transacting business with unlicensed insurance agents, such companies shall be liable to a sum five times the premiums received in relation to insurance transactions as penalty.

Insurance Brokers

In contrast to insurance agents, insurance brokers act on behalf of the policyholder. They assess risks, negotiate coverage, and assist policyholders throughout the insurance transaction.

An entity intending to operate as an insurance broker is required to be registered under the Companies and Allied Matters Act(“CAMA”). In addition, a partner or the chief executive officer of such a company must be a member of the Chartered Insurance Institute of Nigeria, belong to a recognized body of registered insurance brokers, and possess relevant cognate insurance experience.

Any person or entity that operates as an insurance broker without registration and licensing by the Commission is liable to a fine of N10,000,000 in the case of a corporate entity, or N5,000,000 or imprisonment for a term of 12 months in the case of an individual. Furthermore, any licensed insurance company that transacts business with an unlicensed insurance broker, or with an insurance broker whose licence has expired, shall be liable to pay as a penalty the commission due to it on such transactions.

Furthermore, to operate as an insurance broker, the entity must provide comprehensive risk assessment in respect of the insurance policy. The Act also provides that no insurance broker shall engage in the business of reinsurance brokering without the prior approval of the Commission. In addition, an entity licensed to operate as an insurance and reinsurance brokering firm shall neither directly nor indirectly hold more than 10% interest in any insurance company or loss-adjusting company.

An insurance broker is also required to maintain a professional indemnity cover of not less than N100,000,000 or 50% of its preceding year’s annual brokerage income, whichever is higher, among other regulatory requirements. Under the Insurance Act 2003, insurance brokers were only required to maintain a professional indemnity cover of 10,000,000 or 50% of their annual income for the preceding year.

Loss Adjusters

Loss adjusters are intermediaries who assess or investigate the compensation due to a policyholder in the event of an insurance claim. This category of intermediaries operates on behalf of the insurance company to determine the extent of the loss or damage and to verify the validity and value of the policyholder’s claim. Similar to insurance brokers, loss adjusters are required to be registered under the CAMA. The chief executive officer or executive director of a loss adjusting firm must be a member of the Chartered Insurance Institute of Nigeria as well as a recognized body of loss adjusters. In addition, no partner or director of a company engaged in loss adjustment services shall be concurrently employed by another insurance entity. Upon approval, a loss adjuster’s licence shall be renewed every 5 years. In addition, under the Insurance Act 2003, loss adjusters were required to maintain a professional indemnity cover similar to that required of insurance and reinsurance brokers. However, under the Act, this is no longer a requirement.

Any person or company operating as a loss adjuster without a valid licence commits an offence and shall be liable, on conviction, to a penalty of N500,000 in the case of a company, or N250,000 and imprisonment for a term of twelve (12) months in the case of an individual.

Conclusion

The Act seeks to ensure that only duly licensed intermediaries operate in the insurance value chain and enhance consumer protection whilst also creating an enabling environment for the intermediaries. Ultimately, these reforms are expected to enhance public confidence and promote ethical practices within the insurance industry.