By Ayo Bankole Akintujoye

Between 2021 and 2023, digital lending applications became one of the more visible sources of misery in the Nigerian economy. People borrowing small amounts of money from apps on their phones were finding that the fine print included access to their contact lists, and that when repayment was late, the app would send threatening messages to their family members, colleagues, and employers. Interest rates were designed to trap, not to lend.

The Federal Competition and Consumer Protection Commission (FCCPC) stepped in with the Digital, Electronic, Online, or Non-traditional Consumer Lending (DEON) regulations to address this, and the intervention was broadly welcomed because the harm was real and the people suffering it had few places to turn.

That context matters because what has happened since is not a story about a reckless regulator with no legitimate mandate. The FCCPC had good reasons for what it set out to do. The difficulty is where it ended up.

In applying the DEON regulations, the FCCPC extended its scope to cover airtime credit services offered by telecommunications companies, which allow subscribers to borrow a small amount of airtime or data against their next recharge. MTN, Airtel, and others suspended these products in response.

The legal questions around that extension are currently before the courts, and I will leave them there. My interest is in a different question, one that I do not think Nigerian regulatory culture asks often enough: before this enforcement landed, did anyone calculate what it would cost?

Airtime credit is not a product that middle-class subscribers think about very much. You notice it when your balance runs out at an inconvenient moment, borrow a few hundred naira, recharge later, and it is deducted. Convenient, but not essential. For roughly 40 million small businesses and informal economy participants across Nigeria, the calculation is entirely different.

For the trader in Alaba who needs to call her supplier before a price change, the dispatch rider who confirms a delivery address before setting out, and the artisan in Minna who closes jobs over the phone, airtime credit is not a convenience. It is working capital infrastructure. Remove it, and you have not inconvenienced them; you have broken a link in their operational chain.

The asymmetry here is what concerns me most. A middle-class subscriber who loses access to airtime credit usually finds an alternative, but the informal economy participant who depends on it does not have one. The product exists precisely because the formal financial system has not adequately reached them.

Airtime credit filled a gap that banks and fintechs had not filled, and taking it away does not affect everyone equally. It falls hardest on people already operating without a safety net, meaning the people the DEON regulations were designed to protect have ended up among those most hurt by their application.

This is not a coincidence. It is what happens when regulatory decisions are made without a serious assessment of their economic consequences. Mature regulatory systems require economic impact assessments before significant enforcement actions are deployed.

The question is not only what harm this regulation prevents, but also what disruption it creates, who bears that disruption, and whether those people have alternatives. In Nigeria, that question rarely gets asked formally. And when it is not asked, the cost falls on the base of the economy rather than the top.

The N300-N400 billion annual market for airtime credit services is not a statistic about large corporations. It is a measure of productive economic activity distributed across tens of millions of small daily transactions. Disrupting that market without prior analysis of the downstream consequences is not precision regulation. It is a blunt instrument in a space that requires a scalpel.

Predatory lending was a genuine crisis, and the response to it was necessary. But good regulation requires good information, and good information includes an honest accounting of who gets hurt when an intervention lands. Nigeria needs a culture in which no significant enforcement action affects the economy without first undergoing a rigorous assessment of its downstream consequences. Until that culture exists, the informal economy will keep absorbing costs that the people making regulatory decisions never had to quantify.

Ayo Bankole Akintujoye is a Business Strategist with a particular focus on SMEs. He writes from Lagos.