FairMoney Microfinance Bank says it is embedding regulatory compliance and consumer protection into the design and lifecycle of its financial products as Nigerian regulators intensify scrutiny of digital lending and financial technology operators.
The lender said its approach goes beyond meeting regulatory requirements after products have been developed, with compliance, risk management, and legal and consumer-protection considerations incorporated from the initial design and onboarding stages through the entire product lifecycle.
The strategy comes as the Central Bank of Nigeria (CBN) and the Federal Competition and Consumer Protection Commission (FCCPC) strengthen oversight of digital financial services. The FCCPC’s Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations 2025 establish standards for consumer lending services, while the Commission has emphasised consumer protection, data compliance and transparency as conditions for digital lenders.
James Edeh, head of compliance at FairMoney Microfinance Bank, told BusinessDay that the company’s objective was to find a balance between business growth and regulatory obligations without compromising the interests of customers.
According to him, compliance officers play a critical role in translating regulatory requirements into practical rules for product development, ensuring that new services can be delivered digitally while remaining consistent with CBN requirements.
“Compliance is not just about what is at the back. There is also a lot of work that is going on to ensure that the customers are protected,” Edeh said.
He explained that when FairMoney develops a product, compliance personnel are involved from the beginning. “For instance, if the business wants to onboard customers digitally, the compliance officer has to redesign and give them the requirements on how the customers will be able to onboard in the right way that is in tandem with what is obtainable in the regulatory environment. That includes requirements around customer identification, BVN verification, NIN checks and other know-your-customer processes,” he further disclosed.
A major part of FairMoney’s consumer-protection strategy, according to Odey, is making financial products understandable to customers, particularly financially excluded Nigerians who may have limited experience with formal banking.
FairMoney began operations in Nigeria in August 2021 as a digital lender but has since expanded into a technology-driven financial institution offering products to consumers, merchants and agents. Lending, however, remains its core strength.
The head of compliance said the company’s digital model is designed to reach customers who may not have easy access to traditional bank branches, using smartphones and agent networks to facilitate account opening and access to financial services.
But he said simply publishing terms and conditions does not amount to genuine transparency. “Transparency does not just mean disclosure; it also means understanding,” he said, stressing the need to present fees, processes, loan terms and other conditions in simple language that customers can interpret and navigate.
The emphasis is significant as regulators increasingly focus on how digital lenders communicate with borrowers and treat consumers. The FCCPC has adopted a zero-tolerance stance toward exploitation and abusive conduct in digital lending, including improper loan recovery practices.
Edeh said customer complaints are also being used as a feedback mechanism to identify weaknesses in its products and agent operations, while disclosing that complaints involving agents or external collection partners are reviewed, with customer-service calls recorded in real time so that the bank can investigate allegations of inappropriate conduct. “If a customer says your agent was aggressive, we get to review that,” he added.
The recordings enable the company to determine what happened and take appropriate action where an agent or third-party service provider breaches FairMoney’s standards, he explained.
Beyond lending practices, FairMoney said it is strengthening controls around customer data in line with data-protection requirements.
Edeh said the bank’s approach is based first on purpose limitation, which is the process of collecting only data that is necessary for legitimate purposes, and then ensuring that such information is securely stored, transmitted and accessed.
The company has controls governing which employees can access customer information, while data transmitted through its systems is encrypted, according to Edeh, adding that the safeguards also extend to third-party service providers that process customer information.
FairMoney works with external providers, including payment and infrastructure partners, meaning that protecting customer information requires contractual and technical controls beyond the bank’s own systems.
Edeh said third-party providers are subject to strict contractual requirements and security expectations, while FairMoney conducts periodic reviews, including data-protection audits and data protection impact assessments where required.
For FairMoney, however, the wider argument is that compliance should not be viewed simply as a regulatory expense.
Edeh described the role of compliance as finding a middle ground between commercial objectives and regulatory requirements while ensuring that customer protection remains embedded in business decisions.
The bank said it monitors regulatory developments and engages with industry stakeholders to anticipate changes According to Edeh, compliance officers periodically brief the board on regulatory developments and analyse emerging trends to anticipate what regulators could require in the coming months.
This is particularly relevant in Nigeria’s rapidly changing digital-finance market, where the FCCPC has resumed implementation of its 2025 digital lending regulations and maintains a public register of approved digital lenders.
For FairMoney, the regulatory shift is therefore becoming part of the architecture of the business itself, from customer onboarding and loan disclosures to data security, agent conduct, product development and technology infrastructure.
The implication is that the next phase of digital lending competition in Nigeria may be determined not only by how quickly a lender can disburse money but also by how effectively it can build trust, transparency and regulatory compliance into the products customers use every day.
