How To Start Money Lending Business In Nigeria: Easy Guide


Average business person in Nigeria wants to grow his/her business as such will get credit or loan from available sources. Businessmen now approach money lenders because bank requirements and terms/conditions are sometimes cumbersome. This scenario is making money lending business very lucrative. Many small businesses/petty businesses are in dire need to get money to expand or start their businesses.

With the coming of various credit bureau, the issue of unknowingly advancing loans to companies and individuals with bad credit has been addressed.

Money lending business is very lucrative, you can call it micro-finance bank or soft loan lenders etc. People don’t want to hear of money lenders because of the believe that many of the people doing money lending business use juju. Hence, the reason it has upgraded to the new names but the still do one and the same thing.

Money lending business, micro finance business
Money lending business. Image from nairaland

Although the business is risky because many of the lenders don’t pay back yet there is still profit in it. All you need to do is to device means of getting your money back. This can be done by getting involved; training, giving advice and maybe offering to advertise the people’s businesses for success.

How To Start Money Lending Business

Here are the requirements needed for Micro finace business cum money lending business:

Choose a Niche

You can be a general money lender or loan industries which is good but carving a niche will help you get the needed certification easily.  The amount you have should determine the calibre of people to loan money. You can choose those into pos business, small scale farming, roadside vendors etc.

Register with the Necessary Regulation

You need to have a business name, so register your business name with CAC. This will make your business more professional especially if you want to make it a Career or means of livelihood. Before now that wasn’t necesaary I guess the people in interior village still run their lending business like that without any permit or business name. 

Soft loan business
Micro finance

Money Lending Registration Process

First Step

Write application to the MagIstrate Court with the following documentation 

  • A covering letter (application letter)
  • Submission of the photocopies of CAC certificate (form 2 and 7, Memorandum and Articles of Association). Your memorandum must include financial service, or money lending business. And a share capital of not less than #20,000,000.
  • Police Clearance
  • Tax clearance
  • Bank account maintenance (current account.)
  • The Magestrate Court Registry will give you Form B and C of the money lenders ordinance

Second Step

Write Application to the Ministry of Home Affiars and Tourism

  • You will be required to pay #10,000 fee for the money lenders certificate
  • Pay #50,000 to the Ministry for invoice 
  • Submit the application with a covering letter, the duly completed form B and Form C you got from the Magistrate court,
  •  certificate of incorporation from CAC, 
  • police report (from commissioner of police) showing finger prints applicants or directors or proprietor, Pay as you earn certificate (PAYE)  3 years income tax clearance and prove of payment of the application fee.


The minstry of Home Affairs and Tourism  will visit your premises (your registered address)just like Nafdac; to investigate your activities. When they are satisfied you will be given the money lending permit.

Money lending business
Soft loan business

Establish your lending Guidelines

Put your documentation in place, it has to be solid and properly spelt out or worded. Make sure your clients sign all documents.

Draw out a plan, give out loans that can bring in weekly or bi-weekly inflows and not much of IPOS/contracts because they can tie down your money and delay expansion.

Accomodate reliable referrals. Give room for referrals that are qenuine because those ones can pay because of the trust given to them by their referrals.

How much is needed to start a money lending business

If you have the capital for the business, go and meet people who are established and are successful in the business they are many in Nigeria. Money leading business can be started with 20M Naira but how you run it and your target businesses can determine the capital to start with.

How to succeed in Money Lending Business

You should have business experience and the ability to generate cash-flow, the initial capital and mandatory expenses is a critical factor to watch out for because it can mar or make your business.

The business is very risky no doubt but you have to be very smart and adopt methods that will make the borrowers payback your money. One of the methods to use is called group pressure methodology but that is with special training.

Start your money lending business as NGO with financial empowerment being one of the aims. This is because if you are starting direct as a micro-finance you will need to put a lot of things in place.


Although the default rate in money lending business is high but at the end you will still have some good profit. Any money business is profitable whether thrift collection, pos business etc.

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