The authorized minimum share capital for a digital money lending company in Nigeria is 20(Twenty) Million Naira.

Digital money lending in Nigeria is regulated by the home affairs ministries of various states,the Corporate Affairs Commission (CAC), and the Federal Competition & Consumer Protection Commission (FCCPC).

The money lending laws of various states in Nigeria are silent on digital moneylending, even though traditional money lending licenses are to be used only within the state that issued the money lending license.

Businesses that wish to engage in digital lending operations without any possible regulatory blocks in the future can simply opt for a national Microfinance Bank license(with an authorized minimum share capital of 5 Billion Naira) or a Finance Company License (with an authorized minimum share capital of 100(Hundred) Million Naira).

The available Microfinance Bank license categories in Nigeria are:-

a).Tier 1 Microfinance bank licenses :- With an authorized minimum share capital of 200 Million Naira share and a limit of 4 branch offices within 5 contiguous Local Government Areas (LGAs) in a state.

b). Tier 2 Microfinance bank licenses:-With an authorized minimum share capital of 50 Million Naira and a limit of 1 branch office within the same LGA.

c). State Microfinance bank licenses:- With an authorized minimum share capital of 1 Billion Naira and at least a start-up minimum of 10 branch offices.

d). National Microfinance Bank licenses:- With a minimum share capital of 5 Billion Naira.

Digital microfinance banks currently have no specific licensing requirements except the technical requirements outlined by the Central Bank of Nigeria (CBN) for banks seeking to operate digitally alongside their traditional brick & mortar banking operations. It is advisable however that any Microfinance Bank other than a National Microfinance Bank seeking to operate nationwide avoid having physical structures of any kind outside the limitations of its original license.

Payment Solution Service Providers/PSSPs are licensed to render 3rd party payment processing services between end-users and merchants. They have an authorized minimum share capital requirement of 100(One Hundred) Million Naira.

Payment Terminal Service Providers (PTSPs) are businesses licensed to support merchant transactions through the provision of payment terminal services in the form of Point-of-Sale(POS) & Contactless payment terminals in Nigeria. PTSPs have an authorized minimum share capital of 100(One Hundred)Million Naira.

Banking Super-Agents are businesses licensed by the CBN to provide banking agency services on behalf of other financial institutions, these services limited to account opening, cash deposits and withdrawals, transfers, and utility payment services. Banking Super-Agents have an authorized minimum share capital of 50 (Fifty) Million Naira and are required to have at least 50(Fifty) agents spread across its geographical area of operations.

A PSS License is a composite license granted by the CBN and is made up of:-

a). A Payment Solution Service Provider (PSSP) license.

b). A Payment Terminal Service Provider (PTSP) license.

c). A Banking Super Agent license.

A PSS License fee costs 250 (Two Hundred and Fifty) Million Naira.

A switching license enables a business to render switching/payment routing services between different financial institutions. In Nigeria it carries an authorized minimum share capital of 2(Two) Billion Naira.

A PSB is a specialized type of bank licensed to provide specific financial services in under-banked areas of the country. These services include:-

a). Rendering Banking services revolving around savings, accepting deposits covered by the deposit insurance scheme and Monetary withdrawals.

b). Deploying ATMs and Point of Sale (POS) devices.

c). Carrying out payments and remittances through various channels within Nigeria including inbound cross-border personal remittances.

d). Selling Foreign Exchange/Forex realized from inbound cross-border personal remittances to authorized foreign exchange dealers.

e).The issuance of Debit & Prepaid cards in its name.

f).The operation of electronic wallets.

g). The rendering of Financial advisory services.

PSBs in Nigeria have an authorized minimum share capital of 5(Five) Billion Naira.

IMTOs are businesses licensed by the CBN to :-

a).Accept monetary sums for the purpose of transmitting them to person’s resident in Nigeria or another country.

b). Facilitate cross-border personal monetary transfer services such as monetary transfers towards family maintenance & monetary transfer services for foreign tourists visiting Nigeria.

c). Facilitate cross-border money transfers between individuals only.

For international IMTOs seeking IMTO licensing in Nigeria,a minimum share capital of $1(One)Million is required.

-For indigenous (Nigerian owned and registered in Nigeria)businesses seeking IMTO licensing in Nigeria, the authorized minimum share capital is also $1(One) Million or its equivalent in Naira.

-IMTO licensing is also annually renewable, with a renewal fee requirement of 10(Ten) Million Naira.

To an extent, yes. But this requires that you consult a lawyer to provide professional guidance on the alternative business set-up options available to you.

The law firm of I.OGBUKA LEGAL charges negotiable hourly fees, one-off fees, percentage fees and continuous or segmented fees for services rendered based on a fee scale that is strictly in keeping with the boundaries set by the Legal Practitioners Remuneration Order 2023 as well as other considerations such as:

• The complexity, difficulty or novelty of a brief.
• The level of skill,labour, experience, specialized knowledge & responsibility required on the part of a legal practitioner.
• The amount, diversity, technicality & importance of documentation prepared or perused.
• The location & circumstances in which a legal service is rendered.
• The turnaround time required by a client for the completion of a brief.
• The monetary value of a brief ‘s subject matter(such as the monetary fee value of a regulatory license).

The firm of I.OGBUKA LEGAL in addition to the above operates different legal fee categories for Nigerians resident in Nigeria, Nigerians residing abroad, and foreigners. The firm’s fees are always quoted as being separate from costs and disbursements associated with carrying out a brief.

To have an idea of the fee scale prescriptions by the Legal Practitioners Remuneration Order 2023 for lawyers of at least 10 years standing at the bar for a range of services relating to fintech license procurement, click HERE. Note that the fee prescriptions contained in this link do not constitute an inducement or solicitation,are not reflective of the exact fees charged by the firm for services and are in fact in some cases,subject to review depending on each client and within the boundaries of the Legal Practitioners Remuneration Order.