Stricter regulatory compliance is improving transparency and consumer protection in Nigeria’s fast-growing digital lending sector, a compliance expert has said.

James Edeh, head of compliance at FairMoney Microfinance Bank, said this on Friday in Lagos.

Mr Edeh said the growing adoption of digital banking and lending platforms had made compliance a central pillar of operations in the financial services sector.

According to him, regulators, including the Central Bank of Nigeria and the Federal Competition and Consumer Protection Commission, have introduced stricter rules.

“It is to ensure that innovation in financial technology is accompanied by transparency and responsible lending.

“The introduction of guidelines for digital and non-traditional consumer lending in 2025 has strengthened oversight of loan apps and fintech operators.

“In a digital environment where customers cannot walk into a physical branch to resolve issues, compliance serves as a vital assurance that lending platforms operate fairly and transparently,” he said.

Mr Edeh noted that regulatory reforms were helping to curb abuses in the digital lending space by requiring lenders to clearly disclose interest rates, fees, and repayment terms to borrowers.

He added that stronger data protection and responsible debt recovery practices were also becoming key compliance requirements for digital lenders.

According to him, the integration of the Bank Verification Number (BVN) and National Identification Number (NIN) has also improved identity verification within the financial system.

Mr Edeh said the development had helped reduce identity-related fraud, with industry data from the Nigeria Inter-Bank Settlement System showing reported losses dropping from about N52.26 billion in 2024 to N25.85 billion in 2025.

He noted that Nigeria’s exit from the Financial Action Task Force monitoring list in October 2025 had further strengthened confidence in the country’s anti-money laundering and counter-terrorism financing framework.

Mr Edeh said institutions that prioritised compliance and transparency were more likely to gain the trust of customers and regulators.

He said responsible lending practices, clear disclosure of loan terms and adherence to data protection laws were essential for sustainable growth in digital finance.

Mr Edeh added that increasing trust in regulated digital financial platforms was also contributing to deposit growth across the banking sector.

According to him, industry data indicate that total deposits in Nigeria’s bank sector rose to about ₦136 trillion by late 2024, reflecting growing confidence in the country’s digital financial infrastructure.

He said financial institutions that maintain high ethical standards and regulatory discipline would be better positioned to thrive in the evolving financial ecosystem.

“Compliance ultimately protects the consumer by ensuring their data is secure, their deposits are safe, and lending practices remain fair,” Mr Edeh said.

(NAN)