Nigeria: A Fast-Growing Market for Digital Lending
- MD Finance Team
- 2 days ago
- 2 min read
Updated: 1 day ago
Nigeria has become one of the fastest-growing alternative lending markets in Africa. The country’s economy remains underdeveloped and faces structural challenges. Persistently high inflation, reaching 20.1% in August 2025, erodes real incomes and drives demand for consumer credit. At the same time, most Nigerians remain outside the reach of traditional banking services.
Nigeria is also one of the world’s youngest nations, with a median age of just 18.1. Its young population and high digital adoption have accelerated the spread of technology and, in particular, the development of digital financial services.
Credit Institutions and Regulatory Framework Shifts
Nigeria’s credit market is supervised by the Central Bank of Nigeria (CBN), supported by the Nigeria Deposit Insurance Corporation (NDIC) and the Federal Competition and Consumer Protection Commission (FCCPC). The country has 24 commercial banks, around 900 microfinance banks, and over 430 digital lenders.
In the summer of 2025, the Federal Competition and Consumer Protection Commission introduced a new Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulation to govern the digital lending sector nationwide. Unlike earlier rules, which enabled capped interest rates at the state level (for instance, Lagos law limited them to 48%), the new framework removes any fixed rates. However, whether individual states will continue to set their own limits remains unclear.
The Regulation establishes clear requirements for lender registration, consumer protection, and penalties for non-compliance or unethical practices. Meanwhile, state supervision of the sector has tightened: in June 2024, the CBN revoked the licenses of 132 microfinance banks, 4 primary mortgage banks, and 3 finance companies.
Digital Lending and Its Key Players
Nigeria’s digital lending market is expanding rapidly and counts over 430 approved alternative lenders. Valued at $230.9 million in 2024, it is expected to reach $285.9 million in 2025, and almost double to $542.4 million by 2028.
Loan amounts range from a few euros to about €1,760, with terms from 15 days to one year. Most major players offer average annual interest rates hovering around 350%.
Among the profitable market participants is Credit Direct Finance Company Limited, which has been operating since 2006 and demonstrating slow but steady growth. Its revenue increased from €4.9M in 2017 to €12.5M in 2023, while profit rose from €0.9M to €2.6M.
Another major player, FairMoney Microfinance Bank, founded in 2017, has scaled rapidly through digital channels. The lender’s revenue jumped from €44.3M in 2023 to €71.7M in 2024, while net profit grew from €0.5 million to €3.4 million over the same period.
Read the full report to continue exploring market data and the latest trends shaping Nigeria’s fintech and alternative lending.