Digital Lending in Nigeria Shifts to Safer Borrowers

Nigeria’s digital lending industry is experiencing a significant transformation as lenders reduce their reliance on unsecured instant loans in response to the Federal Competition and Consumer Protection Commission’s (FCCPC) Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025. This regulatory shift, combined with rising default risks and increased costs of loan recovery, has prompted lenders to target borrowers with verifiable income and established credit histories.

Mr. Gbemi Adelekan, CEO of KwikPay Credit and President of the Money Lenders Association, indicated that the industry is moving away from unsecured nano loans due to high default rates, focusing instead on business loans with identifiable cash flows. An unnamed executive from a digital lending company confirmed a reduction in unsecured lending exposure.

Babatunde Akin Moses, CEO of Sycamore, highlighted the economic challenges of nano lending, emphasizing the high operational costs associated with managing numerous small loans, compounded by fraud and regulatory requirements.