ALP Seminar 2019

Lendtech: Only Lagos and Kwara States have Modern Lending Acts

Olajide Abiola, Co-founder, Kiakia

Only two states out of 36 states in Nigeria have modern lending laws enacted and re-enacted for the purpose of regulating lending activities and non-depositories financial institutions.

Lagos and Kwara States have been proactive at reviewing and re-enacting these Lender’s Act to reflect the dynamics of the times, other 34 states have left the laws in the archaic formats.

Olajide Abiola, the MD/CEO of Kiakia, a digital lender disclosed that there is no state in Nigeria that does not have a Lender’s Act, most of which remain in the colonial era legislative construct.

“Only Lagos and Kwara States have been proactive at reviewing and re-enacting these laws to reflect the dynamics of the times. Other remains in the archaic formats,” he said.

National dual-banking system is not peculiar to Nigeria as the country mirrored the system after United State of America. However, US established Conference of State Bank Supervisors (CSBS) to supports state regulators in advancing the system of state financial supervision by ensuring safety, soundness and consumer protection; promoting economic growth; and fostering innovative, responsive supervision.

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Abiola said that it is imperative that states get into the arena of proactive regulation of non-deposit based micro-lending or lending while the Central Bank of Nigeria [CBN] ought to remain the only regulator for banking and deposit related lending.

“The state should be actively involved in framing the regulatory systems for lending. That is non-deposit lending. This is what Republics and economics that have taken global financial systems and technological leads are doing.


“Regulation of lending activity requires decentralization and I am glad the constitution of the Federal Republic of Nigeria enshrines that.

“Now, deposit related financial services that involve credit services are solely regulated by the CBN and insured by the NDIC. This is the ideal thing because the protection of depositor’s fund is paramount. However, for purely lending activities and alternative credit scoring, it remains within the purview of the States, just as it is in the United States of America,” he submitted.