As stated in our previous article, the Federal Competition and Consumer Protection Commission (the FCCPC") on August 18, 2022, issued the "Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending 2022" (the "Framework") directing all existing digital money lending companies ("Digital Lenders" or "Company") in Nigeria to register with the FCCPC within ninety (90) days from the date of issuing the Framework; and all new Digital Lenders to register as they commence operations.
In furtherance of this directive, the FCCPC has commenced registration of existing Digital Lenders and published names of Digital Lenders that have been granted full or conditional approvals. The FCCPC recently released an official notice on December 6, 2022, extending the deadline for registration from November 14, 2022 to January 31, 2023, to enable digital lending companies who were unable to meet the deadline, to comply with the directives issued under the Framework.
It is important to note that the provisions of the Framework should be adhered to by Digital Lending Companies in addition to any other regulatory requirements set out by the Central Bank of Nigeria (CBN) in regulations and licenses; the Nigerian Data Protection Bureau (NDPB); and all other laws and regulations that previously applied to the Company, depending on the license held by it (see our article on FinTech licenses).
In this article, we have set out the requirements for registering with the FCCPC in line with the provisions of the Framework, and other documents that may be required of companies wishing to be registered.

Requirements for Registration

A. In complying with the provisions of the Framework, Digital Lenders are required to-

1. Submit a duly completed FORM DLG 001 highlighting the following information:

  1. registered name, physical address, and contact details of the Company;
  2. website of the Company;
  3. identity and nationality of its promoters, directors, and initial key role players;
  4. source(s) of funding including equity, debt, or otherwise. This should include details on the nature of the instrument, capital injection, the identity of sources, and the nature of business of sources;
  5. details of affiliations with other companies, institutions, or similar businesses, whether local, regional, or global;
  6. consultants, agents, or any other person assisting with the registration process, operations, or management. The Company is required to authorize a representative to act on its behalf;
  7. bankers;
  8. proposed interest rate regime and loan balance calculation methodologies;
  9. any licenses authorizing the business to operate; and
  10. list of all apps in operation or intended for operation. The Company is also required to notify the FCCPC of any material modifications made to these apps or the introduction of new apps.

2. In addition to the FORM DLG 001, the Company is also required to submit the following documents;

  1. certified copy of its certificate of incorporation;
  2. a brief description of the business of the Company;
  3. organogram of the Company;
    d) name and address of person(s) within the Company authorized to accept correspondences on behalf of the Company;
  4. evidence of membership in any trade or professional association;
  5. any service level agreements with service providers with respect to operations;
  6. evidence of feedback and complaint resolution mechanism;
  7. evidence of tax payments or tax waivers where applicable;
  8. all applicable fees associated with the service and
  9. a declaration of digital lending businesses in Nigeria (FORM DLG 002). This declaration is basically a confirmation by the Company's directors of its compliance with all provisions of the law with respect to third-party privacy rights and personal data, as well as recovery practices that are consistent with fair lending principles provided for in the FCCPC Act 2019. The declaration should also confirm that the Company's processes and operations comply with the CBN Guidelines on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

B. Following a review of the Company's application, the Company may also be required to provide further documents to ensure compliance with the provisions of the NDPR including the following:

  1. terms of use,
  2. privacy policy,
  3. code of conduct, and
  4. evidence of implementation of feedback and complaint resolution mechanism

Conclusion
Even though the Framework does not set out penalties for non-compliance, the penalty set out in Schedule 1 of the FCCPC Administrative Penalties Regulations 2020 will apply. There is also the risk of the Company being banned from operating until they conform and other sanctions being imposed on the Company.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.