A Finance Company, unless otherwise stated, means a company licensed to carry on Finance Company business. Finance Company Business means the business of providing financial services to individual consumers, and to industrial, commercial, or agricultural enterprises.[i] Operators of a Finance Company shall be permitted to perform, amongst others, the following activities:

  1. Consumer Loans
  2. Fund Management
  3. Asset Finance
  4. Project Finance
  5. Local and International Trade Finance
  6. Debt Securitization
  7. Debt Factoring
  8. Financial Consultancy
  9. Loan Syndication
  10. Warehouse Receipt Finance
  11. Covered Bond

Notwithstanding the above-mentioned, finance companies are not permitted to carry out the under-listed activities:

  1. Deposit Taking;
  1.  Non-financial activities such as trading, construction, and project management;
  2.  Other financial services such as stock broking, issuing house business, registrars services, e.t.c;
  3.  Foreign Exchange transactions except through their correspondent banks/ authorized dealers

It is important to state here that every company desiring to be licensed as a Finance Company shall be on a “stand alone” basis and thus be strictly limited to solely engaging in Finance Company business as defined above.


 Any company seeking a license for a Finance Company business in Nigeria shall apply in writing to the Governor of the Central Bank of Nigeria. Such application shall be accompanied by the following:

  1.  A non-refundable application fee of N100,000 (One hundred thousand naira only) in bank draft, payable to the Central Bank of Nigeria.
  2. Deposit of the minimum capital of N100 million (One hundred million naira only) in bank draft made payable to the Central Bank of Nigeria. The capital, thus deposited together with the accrued interest, will be released to the promoters on the grant of the final license.
  3. Satisfactory, verifiable, and acceptable evidence of payment by the proposed shareholders of the minimum capital of N100 million.
  4.  Detailed business plan or feasibility study, including:
  5. the objectives and aims of the proposed Finance Company.
  6.  The need for the services of the Finance Company.
  7. The special services that the Finance Company intends to provide.
  8.  A five-year financial projection for the operation of the Finance Company, indicating its expected growth and profitability.
  9.  The branch expansion program [if any] within the first five (5) years.
  10. The proposed training program for staff and management succession.
  11. Details of the assumptions upon which the financial projection has been made.
  12. The organizational structure of the Finance Company, setting out in detail, the functions and responsibilities of the top management team.
  • The conclusions are based on the assumptions made in the feasibility report.
  •  A copy of the draft Memorandum and Articles of Association. The objectives of the Company, as disclosed in its Memorandum and Articles of Association, should agree with the services listed under the scope of permissible operations for Finance Companies.
  • A letter of intent to subscribe to the Finance Company, signed by each subscriber.
  •  A copy of the list of proposed shareholders in tabular form, showing their business and residential addresses and the names and addresses of their bankers.
  •  Names and curriculum vitae (CV) of each of the proposed members of the Board of directors, including other directorships held. The CVs must be personally signed and dated. The promoters would also be required to submit the names and curriculum vitae of the proposed management team.
  • Thereafter, the Governor of the CBN may grant a License to the Finance Company.
  •  Where a license is granted subject to additional conditions, the Finance Company shall comply with those conditions to the satisfaction of the CBN within such period as the CBN may deem appropriate in the circumstances.
  • No proposed Finance Company shall incorporate/register its name with the Corporate Affairs Commission until a written approval (approval in principle) has been communicated to the promoters by the CBN, a copy of which shall be presented to the Corporate Affairs Commission.
  • Licenses shall be renewed within the first quarter of each year at a non-refundable fee to be stipulated by the Bank from time to time, subject to the operations of the Finance Company being satisfactory to the Bank.

Other financial requirements

  1.  Non-refundable Licensing fee – N250,000
  2.  Non-refundable Annual Licensing Renewal fee – N20,000 (Payable within the first quarter of each calendar year)
  3. Change of Name fee – N20,000

Conditions Precedent to the Commencement of Operations

 The promoters of a Finance Company shall submit the following documents to the Central Bank of Nigeria before such Finance Company is permitted to commence operations:

  1. A copy of the shareholders’ registers in which the equity interest of each shareholder is properly reflected.
  2.  A copy of the share certificate was issued to each shareholder.
  3.  A certified true copy of Form C02 [Return of Allotments] filed with the Corporate Affairs Commission.
  4. A certified true copy of Form C07 [Particulars of Directors] and written confirmation that the Board of Directors approved by the Central Bank of Nigeria has been installed.
  5.  A certified true copy of the Memorandum and Articles of Association filed with the Corporate Affairs Commission.
  6. The opening statement of affairs was audited by an approved firm of accountants practicing in Nigeria.
  7. A certified true copy of the certificate of incorporation of the company.
  8.  A copy of each of the letters of offer and acceptance of employment by management staff and a written confirmation that the Management team approved by the Central Bank of Nigeria has been put in place.
  9. A letter of undertaking to comply with all the rules and regulations guiding the operations of Finance Companies.
  10.  Evidence of registration with the Finance Company’s association umbrella body.  The Finance Company shall inform the Central Bank of Nigeria of the location and address of its Head Office.
  11.  The Finance Company shall be informed in writing by the Central Bank of Nigeria that it may commence business after a physical inspection of its premises.
  12.  The Finance Company shall inform the Central Bank of Nigeria in writing of the date of commencement of business.

[i] CBN Revised Guidelines for Finance Company in Nigeria

[ii] Ibid

Written bOlawunmi Ojo for The Trusted Advisors

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