In Lagos, Nigeria, money lending is regulated to protect both lenders and borrowers. Obtaining a Money Lender License is a legal requirement for individuals or companies intending to engage in money lending activities within the state. This comprehensive guide below will walk you through the process and requirements for securing a Money Lender License in Lagos.
1. Pre-Application Requirements:
- Business Structure: The Money Lender License is typically granted to registered companies. Therefore, you must register a limited liability company with the Corporate Affairs Commission (CAC). The company can have any authorized share capital if owned by a Nigerian citizen. A foreign-owned entity must have a minimum of N100 Million authorized share capital.
- Object Clause: Ensure the object clause in your company's Memorandum of Association explicitly includes providing money lending services.
- Police Clearance: The first step is to obtain a police character certificate for all company directors. The police character certificate will state whether the director of the company has been convicted for any or not. The company can proceed with the application if none of the directors has been convicted of any offence.
- Application to Chief Magistrate: Submit an application in the prescribed format to the Chief Magistrate of the Magisterial District where your business is located. Attach the police character certificate and other required documents. The Chief Magistrate, upon satisfaction, will issue a Money Lender Certificate (Form B).
- Application to Ministry of Home Affairs and Tourism: Submit a formal application to the Lagos State Ministry of Home Affairs and Tourism for the final certificate, attaching the Form and all other relevant documents. Attach all the company's incorporation documents to the application and provide the required information, including:
o Certificate of Incorporation
o Memorandum and Articles of Association
o Application Status (Particulars of Directors and Secretary)
o Tax Clearance Certificate of the company and directors for three years
o Location of the company's operational office
o Police Character Certificate of the directors
o Evidence of a functioning company bank account
o Reference letter from the company's bank
- Payment of License Fee: Pay the prescribed Money Lender License fee into the designated Lagos State Government account. Attach the payment receipt to the application.
- Physical Inspection: Lagos State Government officials will physically inspect your business premises to ensure they meet the required standards.
- License Issuance: Upon successful completion of all requirements, the Ministry will issue the final Money Lender License to your company.
Other Important Guidelines and Considerations
- Additional Requirement for Online Operation: Where your company intends to engage in digital lending, apart from a money lending license, the company must also apply for and obtain additional approval from the Federal Competition and Consumer Protection Commission (FCCPC).
- Display of Banner: Your company must prominently display a banner indicating that it engages in money lending services.
- Record Keeping: Maintain accurate records of all lending transactions, including loan agreements, interest rates, repayment schedules, and borrower information.
- Compliance: Adhere to all relevant laws and regulations governing money lending activities in Lagos State.
- Professional Guidance: Engage the services of a legal professional experienced in business law and financial regulations to guide you through the process and ensure compliance with all legal requirements.
- Transparency: Maintain transparency and fairness in your dealings with borrowers. Communicate all terms and conditions of loans, including interest rates and repayment terms.
- Responsible Lending: Practice responsible lending by assessing borrowers' creditworthiness and ensuring they can repay loans without undue financial hardship.
Obtaining a Money Lender License in Lagos involves a rigorous process to ensure the integrity and professionalism of money lending operations. By following these guidelines and fulfilling all requirements, you can establish a legitimate and compliant money-lending business in Lagos, contributing to the state's financial landscape. A money lending license issued in Lagos shall expire by the 31st December of the year it is issued; therefore, applying for the license within the first and second quarters of the year is advisable.
By Corporate & Commercial Law Team at Resolution Law Firm
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LL.B? | Tech law |Matrimonial law| Women and minorities Advocate|Writer ?| Researcher??| A Legal Intern at Osuntuyi & Tokan-Lawal Law
2 个月Wow!.. This was helpful, thank you.