Skip to content
  •     +234 812 330 7731
  • Contact Us
  • Login
Counseal Logo
Counseal
  • Why Counseal
    • Why Counseal
      • Why Choose Counseal

        Entrepreneurs in Nigeria and the diaspora trust us. Here's why.

      Beautiful Support. All the way

      We support you from idea to exit.
      WhatsApp, Phone call, email or chat, we have your back.

      Nigeria's Only 100% Money-back Guarantee*

      We support you from idea to exit.
      WhatsApp, Phone call, email or chat, we have your back.

      Browse by Growth Stage
      Solopreneur & Freelancers
      • Validate your idea

        Don't go blind with your venture.

      • Get legal advice

        Clear advice to prevent future issues.

      • Get business advice

        Put your future on the best path possible.

      • Register a Business Name

        Your first start towards legitimacy

      Micro & Small Business
      • Register Company

        File with the CAC in 3 simple steps. Stress free

      • Design and manage your GTM

        Get on-demand help with craft your go-to-market

      • Get Business Grant

        Need grants? Get expert help. On-demand

      • Get Business Loan

        Expert help on-demand to help get business loans

  • Solutions
    • Solutions
      Start a Business
      • Register Company

        File with the CAC in 3 simple steps. Stress free

      • Register NGO

        Make your organisation legitimate. Hassle-free

      • Get On-Demand Legal Advice

        Instant advice with experts to help you get over an hump

      Run Business
      • Unlimited Legal Advise

        On-demand advice from legal experts—as many times as your prefer

      Raise Capital
      • Get NGO Grant

        Need help getting grant for your NGO? Get help on-demand

      • Get Business Grant

        On-demand help to help you towards getting grants

      • Get Business Loan

        Get help with securing a business loan in Nigeria

      • Raise Equity Investment

        Ready to bring in external partners? Get on-demand help

      Invest
      • Get Legal Advice

        Need legal clarity? On-demand advice by experts

  • The BoN Report
  • Blog
    • Blog
      • All
      • Business Tips & Ideas
      • Corporate Affairs
      • Finance a Business
      • Investment in Nigeria
      • Start a Business
      img-1
      Corporate Affairs

      Register a British Virgin Islands Company

      Are you considering registering a company in the British Virgin Islands? The process can be…

      img-2

      Register Your Company in the UK: A Guide for Foreigners

      Register your business in Sweden

      Register a Swedish Company: The Essential Guide for Entrepreneurs

      Register your business in Dubai

      Your Guide to Registering a Dubai Company: An Expert Perspective

      img-5

      Real Estate Business in Nigeria: A Guide to Getting Started

      img-6

      How to Start a Logistics Business in Nigeria

      how to start mini importation business in nigeria

      How to Start Mini Importation Business in Nigeria

      A Guide to real estate investing

      how to start a business in Nigeria

      Start a Business

Start now
Start now
Counseal Logo
Counseal

The Complete Guide to Money Lending Business in Nigeria

Home / Start a Business / The Complete Guide to Money Lending Business in Nigeria
  • Kemipe Bambe Kemipe Bambe
  • Updated March 14, 2023

Contents

Introduction

We can refer to the act of loaning money at an interest rate as a money-lending business. Although it is not as strictly regulated as traditional financial institutions like retail and commercial banks, mortgage companies, insurance companies, etc.

A money-lending business is considered a type of financial institution. It is, however, limited to issuing consumer loans and debts.

When you choose to get a money-lending business registered as a company, the share capital should not be less than N20 million. You will also need to fully understand and adhere to all laid down guidelines by the relevant government agencies.

What you will need to understand following this guide

I will focus the bulk of this tutorial on Lagos and Abuja, as they have the most advanced process of registration of the money-lending business.

How much is the Nigerian money lending licence?

In Lagos, you get an application form for ₦25,000 (Twenty-Five thousand Naira). Thereafter, you will pay the licence fee of ₦200,000. 

In Abuja, they assess the fees payable based on the location of the money-lending business. It should, however, not be more than ₦200,000 (Two hundred thousand Naira) no matter the location, while the costs associated with obtaining a Police Clearance Report for directors and other miscellaneous expenses is also within N200,000 (Two hundred thousand Naira).

Who issues the money lending licence in Nigeria?

The certificate and licence are both granted by a state government agency allowed to do so within the State you do business. 

In Abuja, the Chief Magistrate issues both the certificate and licence. 

In Lagos, after applying to the Chief Magistrate for the Certificate. You would have to go a step further by applying to the Ministry of Home Affairs for the Licence.

What is the importance of the money lending licence in Nigeria?

Simply put, the licence gives you a right to debt recovery and enforcement of loan agreements.

It is also illegal to conduct a business dealing in money lending without a state-issued licence and certificate. The licence issued is valid for one year and renewable on its expiration.

Do I need a licence in every state of the Federation?

This depends on the scale of operation you envisage. As stated above, get your licence and certificate in the States you intend to operate in. You will definitely have more reach with the use of a digital lending application. 

We recommend you to register in all states if you will be using a digital lending application.

Is the money lending business profitable in Nigeria?

Besides standing the test of time, financial institutions involved in lending-related activities are among the most successful companies in the world. If you are interested in this business, please do it. Your investment will be put to good use. As bank interest rates rise, so will the rates charged by private money-lenders.

The high success rate is due to the constant need financial help.

How can I register my money lending business in Nigeria?

Some states are liberal about the choice of corporate personality you give to your business. You can operate the business in your natural name in such states. In Lagos, however, you must register as a company with a minimum share capital of ₦20 million and at least two directors who must be adults. 

Your CAC registration will require:

  • Two (2) proposed names for your company
  • Contact details of the company
    • The company’s address
    • Email address
    • Phone number
  • The directors, shareholders, and company secretary’s personal details;
    • Name
    • Address
    • Phone number
    • Valid means of ID
    • Email address
    • Signature
  • Share capital (minimum of ₦20 million)
  • Subscription to the Share Capital
  • Name of person with significant control in the company
  • Description of nature of business. You should strictly limit this to money lending services and activities that you will do in furtherance of the services.
  • The company’s Memorandum and Articles of Association (MEMART)
  • Some other peculiar documents may be required by the CAC. E.g. where a foreigner is part of the directors.

After incorporation, you can apply for the money-lender’s licence and certificate. For the certificate you will need;

  • An application letter, on your company’s letterhead with the company seal affixed addressed to the Chief Magistrate, for a money-lender’s licence.
    You should accompany the letter with the following;
    • CTC of CAC forms showing details of directors, shareholders, and secretary.
    • MEMART of the company
    • Certificate of incorporation
    • Tax Clearance Certificate (TCC) (in Lagos, the TCC has to be for 3 years for at least two directors of the company); or proof of registration as a taxpayer, if you are a newly registered company.
    • Police Clearance of the corporate body or the individual.
    • Evidence of a current account maintained under a licensed bank with a reference letter from your bank.
    • Evidence of payment of Company Income Tax for 3 years as an old company.
    • Valid means of identity and passport photographs of the applicant (individual directors, if it is a company)
    • Forms B and C from the magistrate court
  • A subsequent application letter on your company’s letterhead to the Permanent Secretary of the Ministry of Home Affairs. This only applies to Lagos.

The company registration takes between 7 to 14 days to be completed except for where you opt for the fast-track which takes 48 hours.

Tax Clearance Certificates, account opening, and police clearance also take about 14 days, all things being equal.

In Abuja, the Certificate and licence take 14 days. In Lagos, the certificate takes 7 days while the licence takes a long time because of the inspection of the applicant’s office.

How can you set up a money-lending business in Nigeria?

Step 1: Do an extensive research

Extensive research into any business venture aid in spotting both possibilities and dangers. It helps in identifying and avoiding blind pitfalls.

With this knowledge, you will make intelligent choices to address issues effectively. It also leads to a better understanding of the industry and customers, which makes it easier to deal with customers and stakeholders.

It gives you an insight into the challenges faced by those currently operating and how best to mitigate such challenges to your advantage.

Step 2: Consultation with professionals

You can increase the chances of your business surviving by consulting accomplished professionals with experience with businesses similar to yours.

This is crucial to providing you with objectivity and bringing you to terms with the stark realities of the money lending industry. You will need to consult at least two of the following professionals:

  • Accountants: They will advise you on financial and record management, payment of tax, managing financial obligations to employees, and starting, maintaining, and increasing your business.
  • Business bankers: They will advise and provide you with services related to banking services, investment strategies, and also tools and methods for making and receiving payments.
  • IT/Digital Consultant: They will help with technological needs.
    They are vital to meet up with today’s market trend of financial technology.
  • Lawyers: Lawyers will help you get your necessary licences, certifications and facilitate legal compliance with all appropriate regulatory authorities.
    They will also help in choosing your legal structure. Their services also include interpreting and drafting your legal documents and contracts.
  • Other consultants to consider include human resources, management, sales, marketing, etc.

Step 3: Set up an internal framework

This comprises all the policies, processes, monitoring sales, and marketing campaigns, code of conduct, and other activities to ensure you keep up with standard practices.

It will ensure that your operations are run economically and efficiently. Check out this article on best practices for developing internal controls for your business.

Step 4: Registration with relevant agencies

First, register your business with the Corporate Affairs Commission (CAC).

We recommend that you register as a private limited company to grant your business a corporate personality different from yours. It is also a major requirement in Lagos to register as a company before they can licence you as a money-lending company.

You will also need to register with the Federal Inland Revenue Service as a taxpayer and get your Tax Identification Number.

Step 5: Legal compliance

So far, all we have discussed borders on legal compliance and they are all of utmost importance to ensure a smooth running business.

Besides these, the Federal Competition and Consumer Protection Commission (FCCPC) recently set up interim guidelines for digital money lenders.

The FCCPC requires you to do the following as a digital money lender:

  • Apply to FCCPC for registration by obtaining and filling out the FCCPC Interim Digital Lending Guidelines Form 001. You will provide details such as:
    • The name and contact address of the business in Nigeria. This includes all your branches in Nigeria.
    • Contact details
      • Phone Number
      • Email Address
      • Website
    • Identity and nationality of promoters, directors, and initial key officials
    • Sources of funding
    • Affiliations with other companies or bodies, whether national or international.
    • Agents or consultants involved in the operations, management, and registration process of the business
    • Bankers to the business
    • The proposed interest rate and other fees with their method of calculation
    • All licenses awarded to the business 
    • A list of the digital application in operation or intended to be in operation
  • Support your application with the following documents:
    • Certified copy of the certificate of incorporation (CAC) of the applicant
    • Description of business of the applicant
    • An organisational chart showing the role players and the position held
    • Name and address of a person allowed to accept all correspondences on behalf of the business
    • Evidence of membership in any trade or professional associations
    • All service level agreements with any service providers regarding operations
    • Evidence of tax payments or tax waivers where applicable
    • All applicable fees associated with services rendered
    • FCCPC form 002- Declaration for Digital Lending Businesses in Nigeria.
      This form is an undertaking of compliance with all laid down guidelines.

Conclusion 

The application process doesn’t have to be a pain. Most delays are because of the unavailability of required documents. But, if you use the services of professionals, the process will be more flexible. 

If you have questions about this or other compliance-related inquiries, book a free appointment with a Counseal expert. We’re here to help! 

Contents

Related Articles

Investment Platforms in Nigeria

Are you interested in investing money in Nigeria and thinking of possible ways to do so? Then this article is for you.  I have highlighted

60 Self-employed Business Ideas You Can Start In Nigeria

With just your internet and laptop, you can get going right now. 

How to Start a Logistics Business in Nigeria

Investing in Nigeria’s logistics industry is lucrative. With an expanding population, more vehicles on the roads, and projections of becoming one of the world’s top 20 economies in 2050, it’s an opportunity not to be overlooked. Here’s all you need to know.

Agricultural Business in Nigeria: A Complete Overview

Looking to invest in Nigeria? Agriculture is your best bet. In this guide, we share the best opportunities. Review now.

  • See More Articles in Start a Business
  • Why Counseal
    • Why Counseal
      • Why Choose Counseal

        Entrepreneurs in Nigeria and the diaspora trust us. Here's why.

      Beautiful Support. All the way

      We support you from idea to exit.
      WhatsApp, Phone call, email or chat, we have your back.

      Nigeria's Only 100% Money-back Guarantee*

      We support you from idea to exit.
      WhatsApp, Phone call, email or chat, we have your back.

      Browse by Growth Stage
      Solopreneur & Freelancers
      • Validate your idea

        Don't go blind with your venture.

      • Get legal advice

        Clear advice to prevent future issues.

      • Get business advice

        Put your future on the best path possible.

      • Register a Business Name

        Your first start towards legitimacy

      Micro & Small Business
      • Register Company

        File with the CAC in 3 simple steps. Stress free

      • Design and manage your GTM

        Get on-demand help with craft your go-to-market

      • Get Business Grant

        Need grants? Get expert help. On-demand

      • Get Business Loan

        Expert help on-demand to help get business loans

  • Solutions
    • Solutions
      Start a Business
      • Register Company

        File with the CAC in 3 simple steps. Stress free

      • Register NGO

        Make your organisation legitimate. Hassle-free

      • Get On-Demand Legal Advice

        Instant advice with experts to help you get over an hump

      Run Business
      • Unlimited Legal Advise

        On-demand advice from legal experts—as many times as your prefer

      Raise Capital
      • Get NGO Grant

        Need help getting grant for your NGO? Get help on-demand

      • Get Business Grant

        On-demand help to help you towards getting grants

      • Get Business Loan

        Get help with securing a business loan in Nigeria

      • Raise Equity Investment

        Ready to bring in external partners? Get on-demand help

      Invest
      • Get Legal Advice

        Need legal clarity? On-demand advice by experts

  • The Bon Report
  • Blog
    • Blog
      • All
      • Business Tips & Ideas
      • Corporate Affairs
      • Finance a Business
      • Investment in Nigeria
      • Start a Business
      img-11
      Corporate Affairs

      Register a British Virgin Islands Company

      Are you considering registering a company in the British Virgin Islands? The process can be…

      img-12

      Register Your Company in the UK: A Guide for Foreigners

      Register your business in Sweden

      Register a Swedish Company: The Essential Guide for Entrepreneurs

      Register your business in Dubai

      Your Guide to Registering a Dubai Company: An Expert Perspective

      img-15

      Real Estate Business in Nigeria: A Guide to Getting Started

      img-16

      How to Start a Logistics Business in Nigeria

      how to start mini importation business in nigeria

      How to Start Mini Importation Business in Nigeria

      A Guide to real estate investing

      how to start a business in Nigeria

      Start a Business

  • Resources
    • Resources
      Tools
      • Free Business Plan Generator

        Get the complete plan for your Nigerian business. Free.

      QUIZZES

      Real Estate - What Kind of House Should You Build in Nigeria?

      Business - Business Structure

      Business - Which online business should you start?

Start now
Start now

    +234 812 330 7731

Login

 

  • Why Counseal
    • Why Counseal
      • Why Choose Counseal

        Entrepreneurs in Nigeria and the diaspora trust us. Here's why.

      Beautiful Support. All the way

      We support you from idea to exit.
      WhatsApp, Phone call, email or chat, we have your back.

      Nigeria's Only 100% Money-back Guarantee*

      We support you from idea to exit.
      WhatsApp, Phone call, email or chat, we have your back.

      Browse by Growth Stage
      Solopreneur & Freelancers
      • Validate your idea

        Don't go blind with your venture.

      • Get legal advice

        Clear advice to prevent future issues.

      • Get business advice

        Put your future on the best path possible.

      • Register a Business Name

        Your first start towards legitimacy

      Micro & Small Business
      • Register Company

        File with the CAC in 3 simple steps. Stress free

      • Design and manage your GTM

        Get on-demand help with craft your go-to-market

      • Get Business Grant

        Need grants? Get expert help. On-demand

      • Get Business Loan

        Expert help on-demand to help get business loans

  • Solutions
    • Solutions
      Start a Business
      • Register Company

        File with the CAC in 3 simple steps. Stress free

      • Register NGO

        Make your organisation legitimate. Hassle-free

      • Get On-Demand Legal Advice

        Instant advice with experts to help you get over an hump

      Run Business
      • Unlimited Legal Advise

        On-demand advice from legal experts—as many times as your prefer

      Raise Capital
      • Get NGO Grant

        Need help getting grant for your NGO? Get help on-demand

      • Get Business Grant

        On-demand help to help you towards getting grants

      • Get Business Loan

        Get help with securing a business loan in Nigeria

      • Raise Equity Investment

        Ready to bring in external partners? Get on-demand help

      Invest
      • Get Legal Advice

        Need legal clarity? On-demand advice by experts

  • The Bon Report
  • Blog
    • Blog
      • All
      • Business Tips & Ideas
      • Corporate Affairs
      • Finance a Business
      • Investment in Nigeria
      • Start a Business
      img-19
      Corporate Affairs

      Register a British Virgin Islands Company

      Are you considering registering a company in the British Virgin Islands? The process can be…

      img-20

      Register Your Company in the UK: A Guide for Foreigners

      Register your business in Sweden

      Register a Swedish Company: The Essential Guide for Entrepreneurs

      Register your business in Dubai

      Your Guide to Registering a Dubai Company: An Expert Perspective

      img-23

      Real Estate Business in Nigeria: A Guide to Getting Started

      img-24

      How to Start a Logistics Business in Nigeria

      how to start mini importation business in nigeria

      How to Start Mini Importation Business in Nigeria

      A Guide to real estate investing

      how to start a business in Nigeria

      Start a Business

  • Resources
    • Resources
      Tools
      • Free Business Plan Generator

        Get the complete plan for your Nigerian business. Free.

      QUIZZES

      Real Estate - What Kind of House Should You Build in Nigeria?

      Business - Business Structure

      Business - Which online business should you start?

Counseal Logo

Counseal is legal and business platform for Nigerian companies crafted by Authority Wit, a Lagos and Boston-based company that builds products that solves problems that make it difficult to start and grow African companies.

img-28 img-29 img-30

Solutions

Plan & Start
  • On-demand Business Advisory
  • Register a Business in Nigeria
  • Business Bank Account in Nigeria
  • Register a Trademark in Nigeria
  • Get Tax Clearance Certificate
Run & Grow
  • Manage Compliance in Nigeria
  • File Annual Report
  • On-demand Legal Advisory
  • Register a Trademark in Nigeria
  • Draft Agreement or Contract
Invest in Nigeria
  • Due Diligence on a Property or Land
  • Due Deligence on a Company or Business
  • Buy Land or Property in Nigeria
  • Sell land or Property in Nigeria

 

Trending Legal Documents

  • Limited Partnership Agreement
  • Code of Ethics
  • Lease Agreement
  • Deed of Assignment
  • Memorandum of Understanding
  • Contract for Sale of Land
  • Change of Registered Name

Resources

  • Blog
  • Business of Nigeria Newsletter
  • Business Plan Generator

Company

About
  • Why Counseal
  • About Us
Support
  • ✉️ [email protected]
  • 🇳🇬 +234 912 225 5030
  • 🇺🇸 +1 (617) 795-4894
img-31  |  An Authority Wit company

@ 2023 Counseal   Privacy Policy    Terms Of Use

Scroll to Top
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company

For your Industry

  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
Sign up for free
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company

For your Industry

  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
Sign up for free
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Solution
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Resources
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Pricing
  • Features
Starting a Business
Starting a Business
Sign up for free
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
Starting a Business
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company

For your Industry

  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
Sign up for free
  • Starting a Business
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company
  • Register a Company
  • Legal Documents
  • Register a Company
  • Register a Company
  • Register a Company