Airtime Lending is Easy

When a good regulation leaves you with questions

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TOGETHER WITH CREDIT DIRECT

If you wake up to a cryptic text from your ex and your bank account is drained, what would you do?

Airtime Lending is Easy

MTN Nigeria suspended Xtratime early this week; today, Airtel followed. Tens of millions of Nigerians who borrow airtime and data daily — through a system where repayment simply comes out of your next recharge — woke up to find the lending machine switched off.

My first instinct was fraud. When an easy “Lending Is Easy” business suddenly stops working, the first guess is usually that some bad actor has managed to jam it. One Value Added Service (VAS) operator told Notadeepdive it can advance up to ₦400 million a day, and in H1 2025, MTN Nigeria’s fintech revenue had reached ₦83.2 billion, with the company saying the growth was majorly driven by airtime lending and advanced services.

The truth, it turns out, is that the suspensions are not about fraud. They are about what happens when a regulator sets out to fix one problem and ends up redesigning it.

The Rules

Nigeria's digital lenders have needed regulation for a while. The loan apps that multiplied over the past few years brought with them harassment, contact scraping, and public shaming as a collections strategy. The Federal Competition and Consumer Protection Commission responded in 2025 with a broad set of rules for Digital, Electronic, Online, or Non-Traditional (DEON) Consumer Lending. The case for that intervention was strong.

The VAS end of the market had its own problems. Forceful subscriptions, auto-renewals, opaque billing; the space has a long history of sharp practices that made consumer protection a real regulatory issue. Nobody can argue that the sector deserved to be left alone.

But what the FCCPC actually produced went further than consumer protection. The DEON regulations pulled airtime and data lending into scope and then imposed a set of requirements that have nothing obvious to do with protecting borrowers. Lenders providing airtime or data credit must work with at least two intermediaries. At least one of those intermediaries must be fully Nigerian-owned. Exclusive arrangements are restricted. Agreements between lenders and service providers and even modifications to those agreements must be filed with the FCCPC for approval.

If your problem is borrowers being harassed, shamed, and overcharged, those are unusual places to linger. Harassment, opacity, data abuse, and predatory collections are one category of problem. Ownership structure, intermediary count, exclusivity, and commercial agreement approvals are a different category entirely.

Since the rules were introduced in July 2025, most of the VAS players began pushing back discreetly, two people with direct knowledge of the matter told me. The compliance deadline was set for January 2026, and for a while, the industry seemed to have treated this as the sort of Nigerian rule that makes noise and then gets worked around.

It did not get worked around. By April, the FCCPC had demanded written assurances of compliance, set an April 16 deadline, and threatened sanctions against operators who did not fall in line. That is the escalation that forced everything into the open.

On April 14, two days before the deadline, the Wireless Application Service Providers Association of Nigeria filed suit at the Federal High Court in Lagos, arguing that the FCCPC had crossed from consumer protection into telecom regulation — territory that belongs to the Nigerian Communications Commission under the Nigerian Communications Act. Justice Lewis-Allagoa has not ruled on the substance but granted an interim order restraining the FCCPC from enforcing key provisions pending a hearing on April 27.

Why does protecting borrowers from harassment require that one intermediary in an airtime lending arrangement be Nigerian-owned?

MTN and Airtel appear to have suspended their airtime lending services, not because the court told them to, but because the regulatory ground underneath them had become too unstable to keep operating on. When your regulator is demanding compliance with rules that a court has just frozen, the safest move is to stop moving.

The result is that a set of rules introduced to protect consumers has, for now, removed a service that tens of millions of consumers actually use. The FCCPC wanted to clean up digital lending. What it got, at least this week, is a market that has stopped lending entirely.

There are many ways to regulate bad lenders. You can stop them from harassing borrowers. You can make pricing transparent. You can punish abusive recovery tactics. You can require licensing and reporting.

What is less intuitive is telling airtime lenders how many intermediaries they must use, what nationality those intermediaries must be, and then requiring regulatory approval for every commercial arrangement in the chain. That is less consumer protection and more market design.

In a business built on captive customers and massive daily volumes, the commercial question is not really who lends but who gets to stand in the middle. The FCCPC’s rules regulate lending and restructure who is permitted to intermediate it, and on what terms.

A cynical person might look at all this and think that Nigeria has never met a healthy pool of cash without immediately wondering how to insert a middleman into it. Scale can wait. Global ambition can wait. Building the best company can wait. First, let us decide who gets to stand in the middle and collect.

The official case for the rule is consumer protection. The public explanation for why consumer protection requires a wholly local intermediary is unclear.

I am not a cynical person. So I am perfectly willing to believe that the FCCPC’s interest in deciding who gets to stand inside one of telecoms’ juiciest business lines is just a coincidence.

See you on Sunday.