Nigeria: Nigeria Money Loan License Procedure
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A Nigeria money lending license can be used for consumer and business loans in Nigeria. The money lending law of the various states regulates and provides for the authorization procedure for lending money in Nigeria.
The money lending license can be obtained in each of the 36 states of Nigeria and the Federal Capital Territory (FCT).
In order for an individual or organization to be a reputable money lender, the person or organization must obtain the money lender license to do such work in Nigeria.
Section Four of the Law on Money Lenders, Chapter 7 of the Laws of Lagos State, provides “that a person who lends money at interest or even who lends a sum of money in return for a larger sum to be repaid is presumed to be a lender of money until proven guilty“.
Only persons and companies authorized to be money lenders by the competent government authority are effectively authorized and recognized as money lenders.
One of the positive aspects of becoming an approved lender is the fact that a lender can exercise their right by taking legal action to recover the primary mortgage and accrued interest from a defaulting borrower.
Requirements for the business loan money license
- A cover letter with the company seal affixed to it
- Proof of the maintenance of an office by the company.
- Certified copy of all incorporation documents
- Certificate of incorporation of the company
- Tax clearance certificate for the applicant; in the case of a newly registered business, proof that the business is in fact a registered taxpayer.
- Three-year tax clearance for at least two directors of the company
- Police certificate for two directors of the company
- Reference letter from an investment bank
- Company logo or symbol
- Proof of payment of the renewal fee.
Procedure and steps for using a cash loan license
An application will be made in the prescribed form to the Chief Magistrate of the jurisdiction where the business will be exercised with the applicant’s letterhead. This request must be accompanied by the required documents.
When applying to the Chief Justice, the applicant will receive Forms C and B.
After obtaining the required legal documents, the applicant must submit a formal request to the Ministry of Interior and Tourism with the relevant documents.
Applicant must make official fee payment to Lagos State Government account.
The last step includes the physical assessment and a visit to the planned office by government officials.
During the visit, in case the organization in question already operates in cash lending, the books will be inspected in addition to the workplace.
The official will also inspect the company’s signage.
In the event that the business complies with legal requirements and to the satisfaction of government officials, the applicant will be issued the license to loan money.
Renewal of the money lending license
State-issued money lending licenses are for one year. The license must be renewed annually.
The requirements for the renewal of the money lender license are as follows:
- Renewal request
- Lender Ordinance (Form B) of the District Court
- Duly completed and endorsed (form C) by the Chief Magistrate Court
- Previous license issued
- Updated tax clearance
- Proof of payment of the renewal fee.
- inspection and re-visit.
Important facts about money lending and licensing operations in Nigeria
- A license from the Central Bank of Nigeria (CBN) is not required to lend money to Nigeria.
- A money lending company can engage in consumer and business loans in Nigeria
- The CBN Finance Company license can also be used in place of the Money Lending license to engage in consumer loans.
- Money lending licenses are issued by various states in Nigeria.
- Some states (particularly Ogun State in Nigeria) require these incorporation documents to indicate that the registered office of the company is in their state.
- A money lending license lasts from January to December, and as such, it must be renewed annually.
- A licensed money lender cannot receive deposits or savings from a member of the public. Any business wishing to receive deposits should opt for a microfinance bank license issued by CBN.
- There is no law preventing a money lender from doing business online.
- A money lending company obtains a license in all the states where it intends to open a physical office.
- A foreign company wishing to participate in money lending in a State of Nigeria must register a separate entity in Nigeria, as only a company duly registered in Nigeria can participate in a business in Nigeria in accordance with the Companies and Related Business Act. , LFN 2004.
To conclude, it is essential for every organization that is considering carrying out a money lending service to obtain the appropriate license, in order to legitimize the business and also to have the right to absolute legal recourse.
Finally, a Standard FinTech (FINTECH) start-up company seeking to participate in money-lending activities via mobile technology may also obtain a money-lending license from each state in which the company intends. to maintain his company.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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