The money lending business remains in high demand in Nigeria, driven by the current economic situation and the presence of numerous SMEs lacking funding. If you’re interested in starting a money lending business in Nigeria, it’s crucial to understand the process and complete the necessary registration.
Here’s a step-by-step guide:
- Determine the Required Capital: Currently, the share capital for a money lending business must be at least N20 million. This capital is necessary to cover operational costs and lend out funds before generating profits.
- Register with the Corporate Affairs Commission (CAC): The registration process involves several steps, and most of them can be completed online. Visit the CAC website (https://www.cac.gov.ng/) and follow these steps:a. Reserve your company name. b. Fill out the CAAC 1.1 Pre-registration form. c. Pay the filing and stamp duty fees. d. Upload the requested documents, including CAC1.1, MEMART, Form of Identification for Directors and Secretary, proficiency certificate, stamp duty certificate, and evidence of CAC payment. e. Submit the original documents to an official CAC office.
- Complete Money Lending Business Registration:Step 1: Apply to the magistrate court and provide the following documents:
- Application letter
- Certificate of incorporation
- Tax and police clearance
- Memorandum and articles of association of your company
- Evidence of maintaining a current bank account
- Certified copies of CAC form 2 and 7
If approved, the magistrate court registry will provide a letter and Form B of the money lending ordinance.
Step 2: Apply to the Ministry of Home Affairs and Tourism by following these steps:
- Pay N10,000 to purchase the money lender certificate.
- Obtain an invoice of N50,000 from the Ministry.
- Submit your application with Form B and Form C from the magistrate court, evidence of payment, certificate of incorporation, police report from the commissioner of police, PAYE certificate, and a 3-year income tax clearance certificate.
Step 3: The ministry will conduct a visitation and inspection of your business office. Upon successful inspection, you will receive your Money Lending Permit.
- Prepare for Business Operations:
- Develop a money lending operational manual.
- Gather all necessary forms and documentation required in the money lending process.
- Establish an efficient electronic system to streamline loan-giving processes.
- Seek Professional Help: It is advisable to seek legal and professional assistance when starting a money lending business, as it requires expertise.
Conclusion: Once you have completed the registration process and obtained the necessary permits, running a money lending business in Nigeria requires effective management and strategic planning. It’s important to develop sound business strategies beyond the registration stage. Ensure you have all the required documents in place, and follow legal and operational best practices for a successful money lending company in Nigeria.