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Laws Governing Money Lending Companies In Nigeria




Laws Governing Money Lending Companies In Nigeria

By offering accessible credit to individuals, small businesses, and even corporations, money lending play a crucial role in the Nigerian financial system. However, the Nigerian government has established a number of laws and regulations governing the operations of money lending companies in order to ensure consumer protection and maintain stability in the lending sector. In addition to giving a thorough overview of these laws, this article aims to clarify the legal ramifications of lending activities in Nigeria: “Laws Governing Money Lending Companies In Nigeria.”

Meaning And Background

The concept of money lending, also referred to as peer-to-peer lending or microfinance in Nigeria, entails the borrowing and lending of funds between Nigerian individuals or small businesses. For those who might not have access to conventional banking services, it offers an alternative source of funding.

The idea of currency Due to the rising demand for financial assistance and the expansion of the informal sector, lending has significantly increased in popularity in Nigeria over the past few years. It is frequently viewed as a means of bridging the gap between banks and people or small businesses who are unable to meet the stringent criteria of conventional lending institutions.

Money lending in Nigeria can take many different forms, such as unofficial lending groups, cooperative societies, and online marketplaces that link lenders and borrowers. These online lending platforms give people a simple and convenient way to borrow money without a lot of paperwork or security.

The interest rates that lenders charge are an essential component of money lending in Nigeria. owing to the greater risk involved in lending to individuals or small businesses Lenders frequently impose higher interest rates than traditional banks on companies with weak financial stability. The lender, the loan amount, and the length of the repayment period can all have a significant impact on these interest rates.

In Nigeria, different lenders have different terms for making repayment. Some lenders provide short-term loans with repayment terms typically between a few weeks and a few months, while others might offer longer-term loans with terms up to several years. In order to repay the loan in full, borrowers must make consistent payments, typically in the form of monthly installments.

Borrowers in Nigeria typically need to meet certain eligibility requirements, such as having a consistent source of income, a valid form of identification, and a good credit history. However, Depending on the lender and the specific platform being used for borrowing, the requirements might change.

In Nigeria, money lending has largely developed into a crucial source of funding for people and small businesses that might otherwise find it difficult to secure financing. It gives them the chance to conveniently and quickly access money, allowing them to invest in their companies, cover last-minute expenses, or fulfill other financial commitments. To make sure they are partaking in a legal and ethical money lending transaction, it is crucial for both lenders and borrowers to exercise caution and carry out in-depth research.

Forms of Money Lending In Nigeria

In Nigeria, lending comes in a variety of forms, including:

  1. Traditional Banks: The most popular sources are commercial banks and microfinance banks. in Nigeria of credit. They provide a range of loan products, including mortgage loans, business loans, and personal loans.
  2. Non-banking financial institutions, such as credit unions, cooperative societies, and finance companies. They provide loans to private individuals and small businesses, frequently with more accommodating terms than traditional banks.
  3. Peer-to-peer lending platforms: These platforms connect individual lenders and borrowers directly, doing away with the need for a traditional financial institution. Through these platforms, people can lend money to other people in exchange for interest payments.
  4. Money Lending Apps: As Nigeria’s fintech sector expands, a number of mobile applications now provide digital lending services. Through their smartphones, users can quickly and easily borrow money using these apps.
  5. Money Lenders: Besides official In addition to formal lenders who work within the traditional banking system, there are also informal lenders. These people or organizations give people short-term loans, frequently with high interest rates and less regulated terms.

Nigerian Laws And Institution Controlling Money Lending Entities

  1. Cash Lenders Act: The main piece of legislation governing money lending in Nigeria is the Money Lenders Act, passed in 1958. This law outlines the conditions and obligations for people or organizations involved in public money lending. It describes the Registration procedures, license specifications, interest rates, and sanctions for non-compliance.
  2. Regulations of the Central Bank of Nigeria (CBN): As the top regulatory body for the financial industry, the Central Bank of Nigeria is heavily involved in monitoring money lending activities. The CBN has issued a number of regulations that money lending businesses must follow in order to maintain the stability of the lending market. The CBN’s corporate governance code, credit risk management system, prudential guidelines, and anti-money laundering measures are some of the rules that fall under this category.
  3. Bank and Other Financial Institutions Act (BOFIA): The BOFIA, enacted in 1991, provides the overarching legal framework that guides the activities of all financial institutions, including money lending companies. Under this act, money lenders are required to maintain an acceptable level of liquidity, adhere to capital adequacy requirements, submit regular reports, and undergo routine inspections by the Central Bank of Nigeria.
  4. Consumer Protection Acts: The Nigerian government is aware of the importance of safeguarding consumers in their financial transactions. As a result, particular legislation has been passed to protect the rights and interests of borrowers. These laws include the Money Lenders (Amendment) Act, the Contracts and Commercial Transactions Act, and the Consumer Protection Act. These laws encourage openness, forbid unethical behavior, and offer channels for resolving disputes between borrowers and lenders.
  5. National Office for Technology Acquisition and Promotion (NOTAP): The NOTAP regulates the inflow and outflow of foreign exchange for technological services rendered by money lending companies. This ensures that such transactions comply with the Nigerian laws, contribute to the country’s economic growth, and safeguard the intellectual property rights of both borrowers and lenders.

 The Steps Taken To Found A Money Lending Company In Nigeria

In Nigeria, establishing a money lending business entails a number of steps and conditions. The following are the essential steps you would need to take:

  1. Business Registration: Register your company as a Limited Liability Company with the Corporate Affairs Commission (CAC). You can either do this in person at their office or online through the CAC website.
  2. Office Space: Locate a good spot for your office and get the required licenses and permits from the appropriate local government agencies.
  3. Capital Requirements: A money lending business must have a minimum 20 million Naira capital base. Make sure to possess the necessary capital, either personally or by luring investors.
  4. Incorporation Documents: Create the necessary incorporation documents, including the articles of association and memorandum, as well as form CAC 1.1 and other pertinent paperwork. During the registration process, the CAC will receive these documents.
  5. Name Reservation: Through the CAC’s online portal, reserve a name for your business. The name must be original and distinct from those of any other businesses.
  6. Tax Registration: Register with the Federal Inland Revenue Service (FIRS) to obtain tax identification numbers (TINs). This is necessary for tax compliance and purposes.
  7. Obtain Regulatory Approvals: The Central Bank of Nigeria (CBN) must be contacted in order to obtain the necessary regulatory approvals. To do this, submit an application and any necessary supporting documentation.
  • Presenting proof that your business can meet the mandated capital requirements.
  • Showing that your business complies with the CBN’s rules on money lending.
  1. Financial Preconditions: Create your company’s three years’ worth of audited financial statements, including a statement of comprehensive income, a statement of financial position, and a cash flow statement.
  2. Kyc And Anti-money Laundering Procedures: Create effective Know Your Customer (KYC) and anti-money laundering (AML) policies to ensure compliance with applicable laws and reduce risk.
  3. Insurance: To protect your financial interests, secure the necessary insurance coverage, such as fidelity insurance and professional indemnity insurance. business and customers.
  4. Marketing and Advertising: Create a marketing plan to reach potential borrowers and adhere to any applicable legal requirements.
  5. Staffing: Employ competent individuals with knowledge of lending operations, risk management, compliance, and customer service.
  6. System and Processes: Create a thorough loan management system to monitor client information, loan activity, and collections.
  7. Compliance: Implement and abide by all laws, rules, and policies that apply to money lending activities in Nigeria.

And finally, it’s advisable to seek advice from experts who are knowledgeable about the particular requirements of establishing a money lending company in Nigeria, such as legal experts, accountants, and consultants. See


The Nigerian government has implemented a thorough legal framework to guarantee openness, consumer protection, and stability in the financial system. lending industry. Money lending businesses can reduce risks related to predatory lending, fraud, and monetary instability by abiding by laws like the Money Lenders Act, BOFIA, CBN regulations, and consumer protection acts. This regulatory environment promotes fair lending practices and builds trust between lenders and borrowers, which helps the Nigerian financial system grow sustainably.

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Resilient Future: The 2023 West Africa Property Investment Summit



Charting a Resilient Future: Insights from the 2023 West Africa Property Investment Summit

In a significant gathering of real estate influencers, the West Africa Property Investment Summit 2023, which took place on Wednesday, 23rd November, brought together leading figures from Kenya, Ghana, South Africa, and Nigeria. Under the theme “Rewriting the Narrative: Positioning & Strategies for the Future,” the summit served as a vibrant forum for in-depth discussions and strategic planning, aiming to shape the trajectory of West Africa’s real estate landscape: “Industry Leaders Chart Course For Resilient Future At The 2023 West African Property Investment Summit.”

Resilience in the Face of Macroeconomic Challenges

One of the key speakers, Mr Tola Akinhanmi, the Head of Real Estate Finance at Stanbic IBTC, took centre stage to address the challenges posed by the current macroeconomic environment. Despite grappling with inflation, exchange rate volatility, and fluctuating interest rates, Akinhanmi’s message was one of resilience. He underscored the real estate sector’s intrinsic strength, characterizing it as a long-term asset class that provides essential business infrastructure supporting people’s livelihoods, work, and recreation. Akinhanmi highlighted Stanbic IBTC’s commitment to working closely with sponsors, understanding assets, and structuring solutions that ensure stability, allowing these assets to remain relevant through various economic cycles.

Optimism for 2024: A Balanced Outlook

Oladapo Runsewe, the Projects and City Reports Lead at Estate Intel provided a positive outlook for 2024. Citing statistics from the Nigerian Bureau of Statistics that indicated an increase in the real construction sector’s contributions to the GDP in the last quarter, Runsewe foresaw a balanced and positive effect on the market. He emphasized the inevitability of construction and development continuing, driven by the ongoing demand for housing and real estate investments. However, Runsewe highlighted the imperative for collaboration, urging industry participants and the government to join forces on a larger scale to address the substantial housing deficit, particularly in urban centres like Lagos.

Sustainability as a Driving Force

Temilola Shonola, Head of the Edge Program at the International Finance Corporation (IFC), brought attention to the importance of sustainable building practices. Shonola urged developers to embrace green building, dispelling the misconception that it is an expensive endeavour. She introduced the IFC’s free App designed to simplify the green certification process, making it accessible for builders looking to contribute to environmental sustainability. Shonola stressed that more of the market need to adopt green building practices, not only for environmental reasons but also as a means to reduce utility costs and ensure long-term impact.

Navigating the Commercial Real Estate Cycle

Pepler Sandri, the Director of Capital Markets at JLL, delved into the complexities of the commercial real estate cycle. Acknowledging the sector’s challenges and the impact of the global COVID-19 pandemic, Sandri painted a picture of recovery and resilience. He noted that Nigeria, like many other countries, faced unique macro issues affecting its recovery. Looking ahead, Sandri expressed optimism as interest rates stabilize, predicting a potential recovery in the next 6-12 months in global developed markets. However, he cautioned that Nigeria might experience a longer recovery period, echoing sentiments from Stanbic’s chief economist, who suggested a year or two before a strong trajectory toward recovery becomes evident.

Conclusion: A Call for Collaboration and Sustainable Growth

The West Africa Property Investment Summit 2023 provided an invaluable platform for industry leaders to share insights, strategies, and collaborative approaches to propel the real estate sector forward. As the summit concluded, attendees were left with a renewed sense of optimism and determination to navigate the ever-evolving landscape of West Africa’s property market. The resounding message from the summit echoed the need for collaboration, sustainability, and strategic planning to ensure a resilient and prosperous future for the region’s real estate industry. Read More

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How Kora Payment Link Helps Online Businesses To Grow




How Kora Payment Link Helps Online Businesses To Grow

The advent of technology with the COVID-19 pandemic has increased the adoption and popularity of online businesses. This is owed to the ability to operate small and medium-sized businesses from anywhere across the globe – which alludes to the fact that the world is now a global village: How Kora Payment Link Helps Online Businesses To Grow.”

Therefore, there has been a meteoric increase in the number of online shoppers seeking products or services from the available businesses in the digital space.

This is evident in the emergence of e-commerce platforms that operate as an online marketplace for both buyers and sellers. It is also playing out in social commerce through the use of platforms like Facebook, Instagram, or X (Twitter) that people continuously use for their shopping experience.

By and large, online business is today a thriving venture that continues to generate a staggering income for businesses and the local economy.

One of the major perks of online businesses is the flexibility of their payments, such that merchants can offer a range of payment methods. The most common options are bank transfers or card payments, in which businesses provide their customers with bank account details to pay.

But as innovation continues to meet the evolution of online businesses, Kora is making payment strategy seamless for both merchants and their customers. This is through the Kora Payment Link.

What Is Kora Payment Link?

A Kora Payment Link is a clickable link that enables business customers to complete a purchase. This is offered as a digital link, which can be used across various social media platforms, websites, or other messaging tools.

How this works is that a customer is directed to a merchant’s online checkout page to complete their transaction anytime they use the Kora Payment Link. This link can be used for both a single transaction, as in a customer invoice and for multiple transactions, as a buy button on social media platforms.

It should be noted that the Kora Payment Link facilitates simple online payments as it does not require a website or code to create and use the link. Therefore, online businesses can easily create a payment link that takes customers directly to the online checkout page of the merchant.

Furthermore, the Kora Payment Link can be used for fundraising, donation, and subscription purposes.

Benefits Of Kora Payment Link To Online Businesses

  • Accept Payments Anywhere

You can receive payments from your customers across the globe through the payment link that you can easily share on social platforms or websites. This is also a “call to action” strategy to compel your customers to complete their purchase with you without delay.

  •  Keep Payments Simple

Customers do not have to log into a mobile app or website before paying. This is because they can easily click the link anytime and from anywhere to take them to the checkout page to complete their purchase.

  • Flexible Payment Options

Kora Payment Link provides online businesses various payment options tailored to their preferences. This can be bank transfers, payment cards, or other digital payment methods like Apple Pay or Google Pay.

Therefore, it is the volition of online businesses to design their payment links towards their preferred payment options. Hence attracting customers to complete their purchase with the knowledge that they can use certain payment gateway.

How Online Businesses Can Use Kora Payment Link

Here is a quick step for using the Kora Payment Link:

  • Create a Kora account and log in.
  • Navigate to “Payment Link.”
  • Enter your details and customize your link with certain preferences.
  • Preview your link and activate it.
  • Share your Kora Payment Link on social media platforms and other messaging tools.
  • Start receiving payments.


We can not overemphasize the importance of having a sustainable payment strategy for online businesses to attract more customers who would complete purchases with them. That is why Kora introduced a payment link which merchants can easily share with their customers for transactions.

Kora Payment Link is easy and free to use, and you can get started by creating a Kora account now. [site]


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How Kora Improves Cross-Border Transactions For Businesses




How Kora Improves Cross-Border Transactions For Businesses

Cross-border transactions are increasingly becoming popular without the concern of waiting days or transfer fees. This is due to the emergence of a fintech company like Kora, which makes cross-border payments simple, cheaper, faster, and easily accessible for businesses: How Kora Improves Cross-Border Transactions For Businesses.”

A BCC Research of January 2023 revealed that the global cross-border payments market is expected to grow from $176.5 billion in 2021 to over $238.9 billion by 2027. The vehicle for this growth is fintech disruptors like Kora, which offers a digital platform and innovative messaging and settlement layers to improve cross-border business transactions.

Ways Kora Is Changing Cross-Border Transactions For Businesses

  • Improved Convenience

Kora enables you to make transactions fully on its platform, unlike the traditional method of visiting physical branches. This allows you to use the platform anytime and from anywhere without a glitch.

A simple user interface and streamlined onboarding characterize this platform to simplify cross-border transactions. It means you can use Kora to receive funds from your customers or transfer with its bulk payout, multicurrency payout, or mobile money options.

  • Speed And Efficiency

Kora enables instant or same-day cross-border transactions, which is in the converse of the traditional settlement layers that can take days. Therefore, businesses can complete their transactions in less than one hour on this platform. You do not experience any form of delay in sending or receiving funds on this platform, irrespective of the amount. This is due to its high scalability and optimization of Kora.

  • Lower Fees

This platform eliminates the meddlesome of third parties like banks and agents in the cross-border transfer chain. As such, it offers a relatively low transaction fee, which is often less than 1% of the transfer amount. This is a major perk of Kora compared to its contemporaries.

  • Enhanced Transparency

Kora offers an advanced tracking dashboard that provides real-time access to your funds and the estimated delivery timelines. This is because the platform has state-of-the-art blockchain technology that provides complete transparency in the tracking of your funds. It helps to reconcile your income with expenses.

  • Security And Compliance

Kora employs features like two-factor authentication (2FA) and other security measures to add extra security layers and protect user transactions and funds. This platform is in total adherence to global compliance standards to protect users’ funds and data.

  • Reduced Foreign Exchange (FX) Risk

Cross-border transactions often involve multiple banks and currencies whose operations result in significant foreign exchange fees and currency volatility that create discrepancies between transferred and received funds.

This is largely the case when businesses in a particular country receive payments from another country.

However, Kora reduces foreign exchange risks that are associated with cross-border transactions by routing funds efficiently at the best exchange rate. On the other hand, Kora users can avoid foreign exchange concerns by using the multicurrency account on the platform that allows them to receive payments in currencies other than their local currency.


Cross-border payment is important to businesses as it enables their growth in the global market. But as digital payments continue to gain traction, there is a need for businesses to know how to leverage the technology to boost sales.

One major platform you can use for your cross-border transactions with your customers is Kora. This is due to the simplicity and scalability it offers you.

You can also start making cross-border transactions seamlessly when you create a Kora account now. [site]

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