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All over the word Individuals and Businesses require money to meet needs and run business operations and this need for funding has led people to seek loans from various sources especially from commercial banks. In Nigeria, the lending industry has recently blossomed because of the general difficulty in accessing loans from commercial banks and this has led to the increase of private lenders.
However, in order to operate legally, these private lenders must obtain a money lending license in the state where they do their lending business. Each state in Nigeria has a legislation governing lending that also regulates the activities of money lenders. This article explains how to get a money lender’s license in Lagos and Abuja.
REQUIREMENTS FOR OBTAINING A MONEY LENDERS LICENSE IN LAGOS
There are certain requirements in Lagos State for Obtaining a Money Lender’s License and they are listed as follows:
- In Lagos state, the applicant must register as a Limited Liability Company with Corporate Affairs Commission (CAC) with at least two directors.
- An application is made in the appropriate format, to the Chief Magistrate of the Magisterial District where the lending company is located .
- A Money Lenders Certificate (Form B) and a letter addressed to the Permanent Secretary of the Ministry of Home Affairs are given to the applicant after a successful application, verifying due diligence and suggesting the issuing of a Money Lenders License.
- An application is then made to the Police for a Clearance report on the directors of the Money lending Company.
- The applicant would then make an application to the Lagos State Ministry of Home Affairs and attach the following supporting documents:
- 3 years (TCC) Tax Clearance Certificate for the Company and at least two directors
- Office address of the company or the individual.
- (CAC) Corporate Affairs Commission incorporation documents
- Police Clearance Certificate for two directors of the company
- A reference letter from a commercial bank in Nigeria
- Proof of payment of Application of application and processing fees
Upon submission of the application, the Ministry will carry out a Physical inspection of the place of business and the license will subsequently be issued once the applicant is deemed to be fit and proper to act as a money lender. The certificate is valid for one year and subject to renewal.
Requirements For Obtaining A Money Lenders License In Abuja
These are the requirements for obtaining Money Lenders License in Abuja:
1. Application letter to the Chief Magistrate accompanied by the following:
- The CAC Incorporation documents of the company.
- Tax Clearance Certificate of the Company.
- Police Clearance and thumbprint (For one or two of the company’s directors)
- Reference Letter from the Company’s bank
- Application letter for money lenders
- Means of identification of the Directors (Photocopy of National I.D)
- Affidavit of fact from of the Directors (this can be obtained from the Customary Court)
- Proof of payment of Application fees
Upon submission of these documents and payment of the prescribed fees, the application will be assigned to any Magistrate within the jurisdiction. If the application succeeds, the Money Lenders Certificate and License is issued to the Applicant by the assigned Magistrate for a period of one (1) year and shall be renewable at the expiration of the license.
The acquisition of a money lenders license is crucial for any business planning to offer money lending services. This is done to establish the company’s legitimacy. The only organizations recognized and allowed to operate a money lending business in Nigeria are those with a government license. Only licensed money lenders have the power to file a lawsuit in court against a defaulting borrower in the case of a default by the borrower.