Doing Business in Nigeria: Update on Lagos State Money Lender License Requirements – Corporate / Commercial Law


Nigeria: Doing Business in Nigeria: Update on the Requirements for Obtaining a Money Lender License in Lagos State

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Money lending has been part of the Nigerian economy since time immemorial and was born out of the desire of individuals and businesses to have access to finance. At present, Nigerian companies interested in engaging in the business of providing credit facilities have the opportunity to consider several licensing options, including the money lender license. Generally, the money lender license is preferred by businesses because it requires less capital and the application process is less cumbersome compared to other licenses.

In today’s article, we briefly outline the steps as well as the current requirements to obtain a money lender license in Lagos State.

Who is a money lender?

The Lagos State Money Lenders Act (the “Act”) provides that anyone who lends money at interest or lends money in return for a larger sum to be repaid will be considered a money lender until proven otherwise. Institutions such as cooperative societies, banks, insurance companies and licensed pawn shops are excluded from this classification by law.

Procedure and Requirements for Obtaining a Money Lender License in Lagos State

A business intending to obtain a money lender (applicant) license must meet the conditions listed below.

1. Application to the district court
The applicant is required to submit an application to any Lagos State Magistrate’s Court for documents (“Magistrate’s Order”) indicating that the applicant is fit and appropriate in character and disposition. The request to the district court must be accompanied by: (i) the documents of incorporation of the company; (ii) the company’s tax identification number (TIN); and (iii) police certificates issued in the name of all directors. After satisfactory examination of the application, the magistrate’s order will be issued by the court to the applicant.

2. Request to the Lagos State Ministry of Interior and Tourism (the “Ministry”)
When issuing the magistrate’s order, the applicant is required to apply to the ministry for the issuance of the money lender license. The request must be made in the form of a written request on company letterhead. The application letter must be accompanied by:
(i) copies of the tax attestation certificates of all the directors of the company (for the last 3 years);
(ii) the company’s tax certificate;
(iii) the constituting documents of the company
(iv) a letter of reference from the bankers of the company;
(v) proof of payment of the money lender license fee in the amount of 200,000 naira (two hundred thousand naira);
(vi) proof of payment of the application form fee in the amount of 25,000 naira (twenty-five thousand naira); and
(vii) proof of police clearance from all directors of the company.

Requirements for companies with foreign participation

Companies with foreign directors must have at least one Nigerian director. Additionally, foreign administrators must have permits to live and do business in Nigeria.

In addition, applicants who have foreign shareholders or ultimate beneficial owners (in the case of a foreign company shareholder) are now also required to present proof of residency to the ministry.

3. Verification of the official address of the applicant
After satisfactory review of the documents listed above, ministry officials will visit the applicant’s official address. The visit is carried out to ensure that the applicant’s business is a potential business. When ministry officials are satisfied that the applicant has complied with all legal requirements, the money lender license will be issued. The money lender license is valid for a period of one year and the applicant will need to renew the license every year to continue to operate as a money lender.


The requirements for obtaining a money lender license vary from state to state and are periodically reviewed by the relevant state ministries. Although the above highlights the current requirements for obtaining the license in Lagos State, the ministry, in some cases, exercises discretion on a case-by-case basis and may require additional information if necessary. It is therefore prudent for potential applicants to inquire to ensure that the above requirements apply.

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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