A Money Lending License in Nigeria can be granted to an individual or a corporate body. However, obtaining the money lender license through a duly registered corporate body is more advisable.
There has been a rapid growth in the Fintech Sub-sector of the Nigerian economy, with most small scale businesses preferring the use of their services as they are a have a lesser processing period, with less bureaucracy. Which is why we’ll be discussing How to get Money Lending License in Nigeria
The Money Lending Law of the various states in Nigeria regulates money lending business operation. In this article, We’ll discuss the step for how to get a money lenders license in Lagos State, which starts by making a prescribed application to the Chief Magistrate.
For an individual or company to become a legitimate moneylender, the individual or company must obtain the Money Lender License to practice in Nigeria. Section 4 of the MoneyLenders Law Chapter 7 Laws of Lagos State provides “that a person who lends money at interest or who lends a sum of money in consideration of a larger sum being repaid shall be presumed to be a money lender until contrary is proven”.
Only persons licensed to be moneylenders by the relevant government authority are permitted to operate as moneylenders. One of the major benefits of being a licensed moneylender is that a moneylender can exercise its right in instituting an action in court to recover the principal loan and accrued interest from a defaulting borrower.
In your efforts on How to get Money Lending License in Nigeria, You must also know that this industry is TECH driven and as such, you’ll need to know How To get Money Lending Mobile Apps In Nigeria, which of course will require the services of a Web Design Company in Nigeria.
Requirements for the application of a Money Lending License in Lagos.
A cover letter with the Company seal affixed to it
The official address of the Individual applicant or Company.
Office address of the Individual applicant or Company
Certified True Copy of the CAC Incorporation Documents- CAC 2 & or CAC Form 1.1
Memorandum and Article of Association of the Company
Certificate of Incorporation of the Company
Tax Clearance for the individual applicant or Corporate Body, if it is a company newly incorporated, then provide evidence that the company is a registered taxpayer.
Three-year tax clearance for at least 2 directors of the company where the applicant is a company.
Police Clearance for the Individual applicant or directors of the company
Reference Letter from a commercial bank
Visitation and inspection.
Steps and Procedure for applying for a Money Lending License
An application will be made in the prescribed form to the Chief Magistrate within the magisterial jurisdiction where the business will be carried on with the applicant’s letterhead
Such application shall be supported with the relevant documents.
Upon the application to the Chief Magistrate, the applicant will be issued a letter and Forms B and C.
After obtaining the necessary court documents, the applicant is to make a formal application to the Ministry of Home Affairs and Tourism with the relevant documents.
The Applicant shall make a payment of the official fee into the Lagos State Government Account
The applicant shall also make payment for the Application Form with the Receipt evidencing payment.
The final stage includes the visitation and physical inspection of the intended office by government officials. Upon visitation, if the company in question is already operating in the money lending activities, the books will be inspected in addition to the office.
If the company complies with the statutory requirements and upon the government officials’ satisfaction, the applicant will be issued with the Money Lending License.
Renewal of Money Lending License
Money lending Licenses issued by states has a one-year duration. The license must be renewed annually.
The requirements for the renewal of money lenders license
Application for renewal
Moneylenders ordinance (form B) from Magistrate Court
Duly completed and endorse (form C) from Chief Magistrate court
The previous license issued
Updated tax clearance
Evidence of payment of renewal fee.
Re-visitation and inspection.
In conclusion, it is important for any individual or company who intend to carry on money lending services to obtain the License from the Ministry of Home Affairs and Tourism so as to legitimize the business and also to be entitled to an absolute legal remedy.
Finally, a typical Financial Technology (FINTECH) startup company seeking to engage in money lending business through mobile technology must also obtain a money lending license from each and every state the company intends to carry out its business. And due to several requirements and steps involved in obtaining a money lending license, it is desirable to engage an expert, especially lawyers to undertake the process.
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