Digital lenders in Nigeria have expressed concern over the Federal Competition and Consumer Protection Commission’s latest plan to regulate their interest rates.

The move follows growing complaints from Nigerians that loan apps charge excessively high rates. Under the newly introduced Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025, the FCCPC announced it will begin monitoring lenders’ interest charges.

“The Commission shall periodically monitor interest rates for services of consumer lending, and ensure rates are not exploitative and inimical to consumer interest. Such monitoring shall be made in compliance with provisions of Guidelines developed pursuant to Section 163 of the Act,” the FCCPC stated in the regulation recently released to all players.

However, this provision in the regulation has been met with resistance from lenders, who argue that interest rates should be driven by the cost of funds and the level of risk involved.

Speaking, the President of the Money Lenders Association, Mr. Gbemi Adelekan, warned that the regulation could disrupt the operations of the already high-risk digital lending market, according to Nairameteics.

“This is a difficult area because for us, the interest rate is determined by the credit risk, market risk, and cost of funds.

“Unless the authorities are planning to give us funds to be able to operate and bring more people into the ecosystem in terms of financial inclusion, I don’t know how this will work,” he said.

Nigerians have long complained about the high interest rates charged by digital lenders. Although many still resort to taking the loans, some later default, attributing their inability to repay to the excessive charges.

Commenting on the high rates charged by digital lenders, Adelekan explained that they mirror the cost of funds and technology.

He noted that unlike banks, most digital lenders—except those with microfinance bank licences—cannot accept deposits and therefore rely on borrowing from banks to finance their operations.

He further stressed that loan apps face significant risks since the majority of their customers are at the bottom of the economic pyramid and often lack stable sources of income.

Adelekan, however, praised the FCCPC regulation for barring loan apps from accessing customers’ contact lists, photos, and transaction details.

He noted that some lenders had abused such access in the past, using it to harass borrowers and carry out other unethical practices.

“It’s a good step in the right direction for the ecosystem,” he said, adding that this would force many lenders to start using the credit bureau.

Also, the Founder of Lendsqr, Adedeji Olowe, said the new rules indicate that the FCCPC has moved beyond experimentation in regulating digital lending.

“Whether you love it or hate it, digital lending isn’t a side hustle anymore. It’s part of the financial system, and it’s going to be treated that way,” he said.

The new regulation builds on the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022, which required all digital money lenders in Nigeria to register with the authorities.