Court Upholds FCCPC’s Powers to Regulate Nigeria’s N400 Billion Digital Lending Market

FCCPC

Court Upholds FCCPC’s Powers to Regulate Nigeria’s N400 Billion Digital Lending Market

Federal High Court dismisses WASPAN suit, affirms FCCPC’s authority to regulate Nigeria’s digital lending industry

LAGOS, Nigeria – The Federal Competition and Consumer Protection Commission (FCCPC) has resumed full implementation and enforcement of the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations, 2025 (DEON Regulations), following a landmark judgment by the Federal High Court in Lagos.

Justice Ambrose Lewis-Allagoa dismissed in its entirety a suit filed by the Wireless Application Service Providers Association of Nigeria (WASPAN), which had challenged the Commission’s authority to issue and enforce the regulations. The court upheld the validity of the DEON Regulations, ruling that they were made pursuant to the FCCPC‘s statutory and constitutional powers and are therefore within the Commission’s legal authority.

The judgment, delivered in Suit No. FHC/L/CS/760/2026, also discharged the interim ex parte order issued on April 15, 2026, which had temporarily restrained the Commission from implementing and enforcing the regulations. The court observed that a statutory regulator should not ordinarily be restrained from performing its lawful statutory duties.

With the legal impediment removed, the FCCPC confirmed that the DEON Regulations are once again fully operational and enforceable, and implementation has resumed with immediate effect. The Commission had suspended implementation immediately after being served with the court’s interim order in April, in compliance with the court’s directive and in keeping with its commitment to the rule of law.

Justice Lewis-Allagoa held that the FCCPC’s regulatory jurisdiction derives from Sections 16(2)(c), 16(3) and 17(2)(d) of the 1999 Constitution (as amended), as well as Item 60(a) of the Exclusive Legislative List, which confers economy-wide authority over competition and consumer protection matters. The court further ruled that Sections 104 and 105 of the Federal Competition and Consumer Protection Act (FCCPA), 2018, give the FCCPC precedence in competition and consumer protection issues, while sector regulators retain their technical, licensing, and prudential responsibilities. According to the court, the relationship between the FCCPC and sector regulators is complementary rather than conflicting. “Concurrency means coexistence, not displacement,” the judge held, adding that the DEON Regulations do not usurp the statutory powers of the Nigerian Communications Commission (NCC) . The court also rejected WASPAN’s contention that the regulations conflicted with the Nigerian Communications Act, 2003, holding that both statutes can be harmoniously construed. It ruled that where competition and consumer protection issues arise, the FCCPA provides the applicable legal framework.

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WASPAN, represented by Senior Advocate of Nigeria Kemi Pinheiro, had argued that airtime lending is a telecommunications value-added service regulated exclusively by the NCC under the Nigerian Communications Act, and that subjecting operators to the FCCPC’s regulatory regime would create dual regulation, increase compliance costs, and undermine the sustainability of the service. The FCCPC, however, maintained that deferred-payment airtime and data services constitute digital consumer lending and therefore fall within its statutory mandate to regulate consumer credit markets and protect consumers.

The judgment is expected to have significant implications for Nigeria’s estimated N400 billion airtime credit industry, where subscribers receive airtime or data in advance and repay later with an associated service charge. Following the ruling, telecommunications operators, including MTN Nigeria, Airtel Nigeria and Globacom, are expected to resume suspension of airtime and data lending services after previously restoring them following the April interim court order. The service, valued at between N300 billion and N400 billion annually, allows subscribers to borrow airtime and data during emergencies and has become particularly important for traders, artisans, small business owners and other low-income earners who depend on uninterrupted mobile connectivity. Industry analysts estimate that approximately 40 million people use airtime credit services regularly, with the vast majority at the base of the economy.

Reacting to the judgment, the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, said the Commission welcomed the court’s decision, describing it as a reaffirmation of its statutory mandate. “The Commission has always maintained that the rule of law is fundamental to effective regulation and good governance. When the Court issued its interim order, we immediately suspended implementation of the Regulations in full compliance with the Court’s directive. Now that the Court has affirmed the validity of the DEON Regulations and delivered judgment in favour of the Commission, we will continue to discharge our statutory responsibilities faithfully, professionally and in accordance with the law,” he said. Ijagwu said the DEON Regulations are designed to promote responsible lending, strengthen regulatory accountability, curb unfair and exploitative practices, and enhance consumer protection in Nigeria’s digital lending market. “Our objective has always been to ensure that innovation and financial inclusion flourish within a transparent, fair and accountable regulatory framework that inspires confidence among consumers, investors and responsible operators alike,” he added.

The FCCPC introduced the DEON Regulations on July 21, 2025, requiring all digital lenders, including loan apps and online credit providers, to register with the Commission and meet clear standards on consumer protection, data privacy, ethical loan terms, and responsible lending. The framework expanded regulatory oversight beyond app-based lenders to include digital and non-traditional consumer lending platforms, strengthening the FCCPC’s authority to monitor the industry and enforce compliance. The regulations target all digital, online, or non-traditional consumer loans, including unsecured cash loans, airtime credit, data loans, cashback schemes, and barter schemes where a verifiable monetary value is exchanged. They also apply to fintechs, mobile money operators, agritech platforms, and cross-state vendors, even if they hold other state or federal licenses. Operators were given a compliance window until January 5, 2026, with sanctions for non-compliance that include fines of up to N100 million or 1% of turnover, and possible disqualification of directors, as well as other enforcement actions such as suspension or revocation of approval.

The FCCPC’s regulatory crackdown has yielded significant results. The Commission has previously delisted several loan applications from digital platforms and sanctioned operators accused of violating consumer rights. Nigeria has experienced rapid growth in digital lending over the past decade, driven by smartphone adoption, limited access to traditional bank credit and increasing demand for instant consumer loans. However, the sector has also attracted widespread criticism over practices including public shaming of borrowers, unauthorised access to phone contacts, hidden charges and aggressive debt collection methods. The judgment effectively restores regulatory certainty for licensed digital lending operators while increasing compliance pressure on firms that previously operated with limited oversight. The ruling is expected to accelerate the professionalisation of Nigeria’s digital lending market by discouraging rogue operators while creating a more predictable regulatory environment for responsible fintech companies. For investors, the ruling provides greater regulatory clarity over one of Africa’s fastest-growing fintech segments. For consumers, it revives protections that had been temporarily suspended while the legal dispute was before the court.