NICA commends FCCPC’s licensing of airtime lenders, warns of risks to Nigeria’s credit system

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Key points

NICA backs FCCPC’s move to license airtime and data lenders, citing improved competition and access to micro-credit.

Concerns raised over potential risks, including poor credit management and regulatory gaps.

Experts call for stronger oversight, financial literacy, and professional standards in digital lending.

Main story

The National Institute of Credit Administration (NICA) has lauded the Federal Competition and Consumer Protection Commission (FCCPC) for licensing five airtime and data lending firms, describing the move as a significant step toward expanding Nigeria’s digital credit ecosystem.

Registrar and Chief Executive Officer of NICA, Prof. Chris Onalo, gave the commendation in an interview with the News Agency of Nigeria (NAN) on Monday in Lagos.

Onalo said the licensing framework would enhance market competition, broaden consumer choice, and formalise access to micro-credit, particularly for underserved populations.

The development follows the enforcement of the Digital Electronic Online, Non-Traditional (DEON) Consumer Lending Regulations 2025 by the FCCPC in January 2026. Under the regulations, firms such as Total Tim Nigeria Ltd, Rane Interactive Medien CLS Ltd, and Mode NG Applications Nigeria Ltd were authorised to provide airtime and data lending services.

He noted that the policy emerged after telecommunications operators suspended similar services due to non-compliance with the new regulatory framework, describing the separation of airtime credit from telecom providers as a positive step in curbing anti-competitive practices.

The issues

Despite the benefits, NICA warned of potential systemic risks associated with the rapid expansion of digital micro-lending. Onalo highlighted concerns over the absence of stringent financial regulations, particularly the exemption of Digital Electronic Online Non-Traditional (DEON) lenders from Central Bank of Nigeria prudential requirements such as capital adequacy and loan-loss provisioning.

He cautioned that the high-volume nature of airtime lending, if poorly managed, could pose risks to Nigeria’s broader financial system.

Additionally, the growing number of first-time borrowers entering the formal credit system through airtime loans raises concerns about financial literacy and responsible borrowing.

What’s being said

Onalo revealed that airtime loans now represent the first credit experience for an estimated 40 million Nigerians, making effective default management critical.

He warned that even minor defaults, if not properly managed, could result in widespread negative credit records, ultimately restricting access to future financing for housing, business, and other productive ventures.

While acknowledging FCCPC’s consumer protection measures—such as mandatory fee disclosure, data privacy safeguards, and limits on multiple loan applications—he stressed that these provisions must be complemented by robust financial education and professional credit management.

The NICA boss also expressed concern over the lack of mandatory certification for credit professionals managing lending and recovery processes, noting that this gap undermines the provisions of the NICA Act 2022.

What’s next

To address these challenges, NICA has proposed a five-point framework to strengthen oversight and safeguard consumers. Recommendations include mandatory licensing of credit personnel, financial literacy programmes for first-time borrowers, and delayed reporting of minor defaults to credit bureaus.

Other proposals include integration with the National Collateral Registry for business-related lending and the establishment of a joint regulatory framework involving the FCCPC, NICA, and the Central Bank of Nigeria.

Onalo emphasised that the current licensing regime presents an opportunity to deepen Nigeria’s credit economy by incorporating previously unbanked individuals into the formal financial system.

Bottom line

While FCCPC’s licensing of airtime lenders marks a major step toward financial inclusion, experts warn that without robust regulation, professional oversight, and consumer education, the initiative could expose millions of Nigerians to long-term credit risks and undermine confidence in the country’s financial system.