Money lending has from time immemorial been a part of the Nigerian economy and was borne as a result of the desire for individuals and businesses to secure access to funding. Currently, companies in Nigeria, interested in carrying on the business of providing credit facilities have the opportunity of considering several licensing options, including the Money Lender's License. Generally, the Money Lender's License is preferred by businesses because it is less capital intensive and the procedure for its application is less cumbersome in comparison to other licenses.

In today's article, we highlight briefly, the stages as well as the current requirements for obtaining a Money Lender's License in Lagos State.

Who is a Money Lender?

The Lagos State Money Lenders Law (the "Law") provides that any person who lends money at interest or who lends a sum of money in consideration of a larger sum being repaid will be regarded as a money lender until proven otherwise. Institutions such as co-operative societies, banks, insurance companies and licensed pawnbrokers are excluded from this classification under the Law.

Procedure and Requirements for Obtaining a Money Lender's License in Lagos State

A company intending to procure a Money Lender's License (Applicant) must fulfil the requirements listed below.

1. Application to the Magistrate Court
The Applicant is required to submit an application to any magistrate court of Lagos State for documents ("Magistrate's Ordinance") indicating that the Applicant is fit and proper in terms of character and disposition. The application to the magistrate court is to be accompanied by: (i) the incorporation documents of the company; (ii) the Tax Identification Number (TIN) of the company; and (iii) police clearance certificates issued on behalf of all the directors. Upon satisfactory review of the application, the Magistrate's Ordinance will be issued by the court to the applicant.

2. Application to the Lagos State Ministry of Home Affairs and Tourism (the" Ministry")
Upon issuance of the Magistrate's Ordinance, the Applicant is required to apply to the Ministry for the issuance of the Money Lender's License. The application is to be made in form of a written application on the Company's Letterhead. The application letter is to be accompanied by:
(i) copies of Tax Clearance Certificates of all directors of the company (for past 3 years);
(ii) the Tax Clearance Certificate of the company;
(iii) incorporation documents of the company
(iv) a reference letter from the company's bankers;
(v) proof of payment of the Money Lender's License fee in the sum of N200,000 (Two Hundred Thousand Naira);
(vi) proof of payment of fees for the application form in the sum of N25,000 (Twenty-Five Thousand Naira); and
(vii) evidence of police clearance of all directors of the company.

Requirements for Companies with Foreign Participation

Companies with foreign directors must have at least one Nigerian Director. In addition, the foreign directors must have permits to live and do business in Nigeria.

Furthermore, Applicants who have foreign shareholders or ultimate beneficial owners (in the case of a foreign corporate shareholder) are now also required to present proof of residency to the Ministry.

3. Inspection of the Official Address of the Applicant
Upon satisfactory review of the above-listed documents, the officials of the Ministry will conduct a visit to the official address of the Applicant. The visit is conducted to ensure that the Applicant's business is a potential going concern. Where the officials of the Ministry are satisfied that the Applicant has complied with all statutory requirements, the Money Lender's License will be issued. The Money Lender's License is valid for a period of one year and the applicant will be required to renew the license annually to continue to carry on business as a money lender.


The requirements for obtaining a Money Lender's License varies from state to state and are periodically reviewed by the relevant state ministries. While the above highlights the current requirements for obtaining the license in Lagos state, the Ministry in some cases, applies discretion on a case by case basis and may require additional information when necessary. It is therefore prudent that intending applicants make enquiries to ensure that the above requirements are applicable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.