MONEY LENDERS ACT
Act · Trade
An Act regulates moneylending by requiring licenses for lenders and capping interest rates to prevent exploitation. It targets moneylenders, borrowers, and state governments overseeing licensing. This protects consumers from unfair lending practices.
MONEY LENDERS ACT
What Is This Policy?
An Act regulating the business of moneylending in Nigeria, requiring moneylenders to be licensed, capping interest rates, and protecting borrowers from exploitative lending practices.
Who Does It Target?
Licensed moneylenders and informal credit providers Borrowers from moneylenders in need of consumer protection State governments licensing moneylenders Courts hearing moneylending disputes
What Does It Aim to Achieve?
Protect borrowers from exploitative informal lending by licensing and regulating moneylenders, capping interest rates, and providing legal remedies for unfair lending practices.
Key Features
Licensing Requirement: All moneylenders must obtain a moneylender's licence before conducting the business of moneylending. Interest Rate Cap: Prescribes maximum interest rates that moneylenders may charge, preventing usury. Contract Requirements: Moneylending contracts must be in writing and disclose all charges clearly. Court Protection: Courts may reopen moneylending transactions that are harsh or unconscionable.
Current Status
Rollout Stage: Active Coverage: Nationwide moneylending sector Beneficiaries: Borrowers; financial inclusion without exploitation Funding: Licensing fees
How to Access
Borrowers: borrow only from licensed moneylenders Verify moneylender licence before signing any agreement Interest rate must not exceed the prescribed maximum Application method: Moneylender licences issued by state authorities.
Important Terms
Unlicensed moneylending is illegal Courts have power to set aside unconscionable loan contracts Digital lenders (apps) are now also regulated by CBN as consumer lenders
Official Resources
Website: https://www.justice.gov.ng Contact: Federal Ministry of Justice / State High Court
Legal Framework
Enacted under the legislative powers of the National Assembly vested by Section 4 of the 1999 Constitution. Operates alongside the Central Bank of Nigeria Act 2007, the Banks and Other Financial Institutions Act 2020, the Consumer Protection Council Act 2004, and the Federal Competition and Consumer Protection Act 2018.