The Federal Competition and Consumer Protection Commission (FCCPC) has been praised for its intervention in the digital lending space, but its extension of regulations to airtime credit services is now costing the Nigerian economy significantly. Between 2021 and 2023, digital lending apps caused widespread misery, with predatory practices like accessing contact lists and sending threatening messages. The FCCPC's Digital, Electronic, Online, or Non-traditional Consumer Lending (DEON) regulations were a necessary response to these abuses. However, in applying DEON, the FCCPC extended its scope to include airtime credit services offered by telecom companies like MTN and Airtel, which allow subscribers to borrow small amounts of airtime or data. In response, these services were suspended.
Economic Impact on Informal Economy
The legal questions around this extension are before the courts, but the broader issue is the lack of economic impact assessment before enforcement. Airtime credit is essential for approximately 40 million small businesses and informal economy participants across Nigeria. For a trader in Alaba needing to call a supplier, a dispatch rider confirming a delivery address, or an artisan in Minna closing jobs over the phone, airtime credit is not just a convenience—it is working capital infrastructure. Removing it breaks a critical link in their operational chain, disproportionately affecting those without access to formal financial systems.
Asymmetric Impact on Vulnerable Groups
The asymmetry of the impact is striking. Middle-class subscribers can find alternatives, but informal economy participants who depend on airtime credit have no substitute. The product filled a gap that banks and fintechs had not addressed. Taking it away harms the very people the DEON regulations aimed to protect. This outcome is predictable when regulatory decisions are made without serious economic consequence assessments.
Mature regulatory systems require economic impact assessments before significant enforcement actions. The question is not only what harm a regulation prevents, but also what disruption it creates, who bears that disruption, and whether those affected have alternatives. In Nigeria, this question is rarely asked formally, and the cost falls on the base of the economy rather than the top.
N300-400 Billion Market at Stake
The annual market for airtime credit services is valued at N300-400 billion. This is not a statistic about large corporations but a measure of productive economic activity distributed across tens of millions of small daily transactions. Disrupting this market without prior analysis of downstream consequences is not precision regulation; it is a blunt instrument in a space requiring a scalpel.
Predatory lending was a genuine crisis, and the response was necessary. But good regulation requires good information, including an honest accounting of who gets hurt when an intervention lands. Nigeria needs a culture where no significant enforcement action affecting the economy undergoes rigorous assessment of downstream consequences. Until then, the informal economy will keep absorbing costs that regulatory decision-makers never had to quantify.
