Introduction
The introduction of Nigeria’s Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations (“DEON”) by the Federal Competition and Consumer Protection Commission (FCCPC) signaled the formalization of the digital lending sector at large. Previously the industry was characterized by its porous barriers and a reputation for data abuse in the form of uncontrolled data access, coupled with exploitative interest rates, DEON was born out of the FCCPC’s crackdown on such unethical practices. With the advent of these regulations came a single-entry point for non-bank digital lending, and guard-rails were put in place to streamline, gate-keep, and effectively filter the market. Such that fewer, better, and more compliant lenders make up the sector. This move was undertaken to give effect to consumer protection and foster an optimized market, objectives that lie at the heart of the proposed regulations.
The DEON Regulations, though initially suspended by the House of Representatives on 18 December 2025 following an investigative hearing with FCCPC representatives and industry stakeholders, were subsequently reinstated and enforcement commenced in early 2026. That reinstatement, however, did not mark the end of the regulatory uncertainty surrounding the framework. In April 2026, the Wireless Application Service Providers Association of Nigeria (WASPAN) filed Suit No. FHC/L/CS/760/2026 before the Federal High Court in Lagos, challenging the FCCPC’s authority to regulate services already governed by sector-specific legislation. On 15 April 2026, Justice Ambrose Lewis-Allagoa granted an interim injunction restraining the FCCPC from enforcing or implementing the DEON Regulations against WASPAN’s members. The FCCPC’s application to discharge that injunction was refused by the court on 28 April 2026, leaving the order in full force. On 22 May 2026, the FCCPC publicly announced the suspension of implementation and enforcement of the DEON Regulations pending the determination of the substantive suit, describing the decision as compliance with the court’s directive.
On 20 July 2026, the Federal High Court in Lagos delivered judgment in Suit No. FHC/L/CS/760/2026. Justice Ambrose Lewis‑Allagoa dismissed WASPAN’s challenge, upheld the FCCPC’s statutory authority under section 163 of the FCCPA, and discharged the interim injunction. As a result, the DEON Regulations are no longer suspended and have resumed full legal effect.
Current Enforcement Position
Following the court’s judgment, the FCCPC announced the reinstatement of enforcement measures under the DEON Regulations. All digital lenders, telecom operators, and service providers within the scope of the framework are once again required to comply with the approval, registration, and consumer protection obligations set out in the Regulations. The earlier 90‑day compliance timeline has been reset, and lenders must ensure prompt alignment with the FCCPC’s requirements.
Appeal Filed
On 21 July 2026, one day after the judgment, WASPAN filed a Notice of Appeal before the Court of Appeal, Lagos Judicial Division, raising nine grounds. The central contention is that the trial court misread section 163 of the FCCPA as conferring economy-wide jurisdiction on the FCCPC without regard to the qualifying phrase “as may be indicated otherwise,” and that section 90 of the Nigerian Communications Act vests the NCC with exclusive responsibility for consumer protection in telecommunications. The appeal also raises a constitutional ground, that the DEON Regulations infringe the freedom of association guaranteed under section 40 of the Constitution. Alongside the Notice of Appeal, WASPAN filed a Motion on Notice seeking an injunction restraining the FCCPC from enforcing the DEON Regulations pending determination of the appeal, to preserve the status quo for the airtime and data-lending services relied on by an estimated 40 million Nigerians. As at the date of this update, the Court of Appeal has not yet ruled on either the injunction application or the substantive appeal, and the DEON Regulations therefore remain in force pending that outcome.
Implications Going Forward
The judgment provides regulatory certainty by affirming the FCCPC’s jurisdiction over non‑bank digital lending activities, even where sector‑specific regulators are also involved. Market participants should now treat the DEON Regulations as fully operational and binding, and prepare for stricter oversight of lending practices, disclosure standards, and partnership approvals. With WASPAN’s appeal and injunction application now pending before the Court of Appeal, the immediate compliance landscape is clear: the DEON Regulations govern Nigeria’s digital lending sector unless and until the appellate court rules otherwise.
Licensing Dilemma
Yet, while enforcement has resumed, questions remain about the scope of FCCPC’s powers, particularly in relation to licensing. While the court affirmed the FCCPC’s authority to regulate consumer protection and competition in digital lending, it also clarified that licensing of telecommunications operators remains the exclusive domain of the Nigerian Communications Commission (NCC). This creates a practical dilemma: the FCCPC had already issued approvals to certain operators, such as; MTN Nigeria, under the DEON regime before the injunction. The court’s judgment means such approvals cannot be treated as formal licenses, and future compliance will require coordination between FCCPC’s consumer protection oversight and NCC’s licensing powers. Market participants must therefore navigate a dual compliance landscape, ensuring they meet FCCPC’s disclosure and conduct obligations while securing the necessary licences from NCC.
1. Key Provisions
1.1 The Scope of Application of the DEON Regulations
The Regulations under review were issued on 21 July 2025 pursuant to section 163 of the FCCPA, empowering the FCCPC to enforce consumer protection laws. They apply to all unsecured lending in Nigeria conducted through digital, electronic, online or other non-traditional means, including cash, airtime, data, services, or barter of quantifiable value. The framework governs lending operations that extend beyond single state boundaries, as well as lenders, vendors, service providers, and collaborators benefiting from such transactions. By establishing broad jurisdictional reach, the Regulations aim to foster healthy competitions, industry growth and effective service delivery.
1.2 Approval Requirements
The Regulations mandate that all consumer lending entities, including those already licensed, must secure FCCPC approval within 90 days of commencement to continue operations, thereby formalizing oversight and eliminating unregulated practices. This approval regime introduces compliance barriers to filter out predatory operators while granting the FCCPC clear statutory authority to monitor and sanction lenders. Article 8 requires undertakings regulated by other authorities to present sectoral licenses before FCCPC approval is granted. Furthermore, Article 10 places partnership approvals under FCCPC control, ensuring contracts reflect collaboration terms and preventing exploitative or monopolistic arrangements without prior authorization. Though the practical operation of this approval was temporarily placed in doubt as a result of the interim court order and regulatory suspension the 90-day compliance timeline and the attendant approval obligations are now enforceable, consequently lenders are required to comply fully with FCCPC oversight.
1.3 Consumer Protection Obligations
An underregulated digital consumer lending ecosystem inarguably presents opportunities for the breach of fundamental consumer rights through vices like the harassment of borrowers and violation of data privacy rights. The Regulations are drafted carefully to address the said violations. In terms of Article 17 of the Regulations, lenders and service providers are mandated to ensure that all terms of the lending services, such as interest rates, repayment terms and associated fees, are fully disclosed to the consumers before any transaction is completed. It is further clarified that these disclosures must be made in clear, legible and simple English that is easily understood by an average consumer. Article 17 ensures borrowers understand the full cost of credit before taking it. This reduces information asymmetry, where lenders traditionally benefit from consumers not understanding complex or hidden charges ultimately curbing abusive or predatory lending practices.
1.4 Registration Requirements
The DEON Regulations provide for a documentary and structural registration framework. Applicants are required to submit; a duly executed Consumer Lending Agreement, Evidence of financial capacity to sustain operations, Certificate of Incorporation, CAC status report and constitutional documents, copies of regulatory licenses (where applicable), standard terms and conditions and a completed application form and evidence of payment of applicable fees. In essence these strict registration requirements promote transparency and accountability at the same time granting the FCCPC the platform to monitor the competence and fitness of players within the digital lending space.
2. Implications of the DEON Regulations
The legal reform imposes higher compliance costs and operational adjustments on lenders requiring revisions to contracts, platforms and consumer onboarding to meet stricter disclosure standards. Compliance now shifts from a “back office” function to a core aspect of digital lending, extending obligations to telecoms and digital infrastructure providers, with FCCPC approval mandated for partnerships. Stricter protocols create shared responsibility across the lending value chain, encouraging smaller lenders and new entrants to collaborate with established, compliant entities. With digital lending surging to $285.9 million in 2025 and projected to nearly double by 2028, the DEON Regulations establish governance that balances market growth with regulatory certainty and consumer protection.
The court has removed prior uncertainty and affirmed the FCCPC’s jurisdiction over non‑bank digital lending activities while clarifying that licensing of telecommunications operators remains the exclusive preserve of the Nigerian Communications Commission. This dual compliance landscape requires lenders and operators to adapt quickly, ensuring they meet FCCPC’s consumer protection obligations while securing the necessary licenses from NCC. The result is a more structured and closely monitored market environment, where compliance is not optional but a prerequisite for sustainable participation. Notwithstanding the benefits of enhanced consumer protection, the dual compliance regime risks creating regulatory overlap and inefficiency.
Operators may be burdened with duplicative reporting obligations to both FCCPC and NCC, raising costs and slowing innovation. Without clear coordination mechanisms, smaller entrants could be deterred, leaving market power concentrated in established players.
Conclusion
The DEON Regulations mark a decisive step in Nigeria’s effort to formalize and safeguard its fast‑growing digital lending sector. After initial suspensions and judicial challenges, the Regulations therefore stand as the operative framework for digital credit, embedding transparency, disclosure, and accountability into the sector. While further appeals or legislative refinements may arise, the immediate reality is clear: compliance with the DEON regime is mandatory and imminent. The challenge ahead lies in harmonizing FCCPC and NCC oversight to ensure that regulation protects consumers without stifling innovation.
Authors: Simiso Sibanda & Zoe Moyo
Legal review: Stella Igidi
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