Soaring Law Practice

01/10/2025

Happy Independence Day, Nigeria.

10/07/2025

Bridging the Gap: Why Non-Regulated Moneylenders in Nigeria Must Strengthen Risk Management

In Nigeria’s dynamic financial landscape, non-regulated moneylenders — those not licensed by the Central Bank of Nigeria (CBN) — have become vital to grassroots economic activity. They provide quick loans to individuals, small businesses, traders, and artisans often excluded from traditional banking services.

However, while these lenders serve a real need, many lack the risk management systems needed to sustain their operations. And in today’s volatile economy, that’s a dangerous gap.

Why This Matters

Moneylenders who operate without CBN regulation are highly exposed to credit risk — the risk that borrowers will not repay their loans. Without a solid structure for assessing, documenting, monitoring, and recovering loans, many of these lenders struggle with:

• High default rates
• Liquidity issues
• Legal vulnerabilities
• Reputational damage

These risks don’t just hurt the lender; they threaten business continuity and investor confidence.

The Role of Moneylenders in Nigeria’s Economy

Moneylenders, especially at the micro and state level, contribute meaningfully to:

• Financial inclusion
• Microenterprise growth
• Rural and informal sector financing
• Employment and trade facilitation

Their impact is undeniable — but so are their vulnerabilities.

Key Risks Moneylenders Face

• Poor borrower profiling
• Lack of formal loan agreements
• Weak loan monitoring
• No structured recovery process
• Limited compliance with state laws

In a tough economy, with rising inflation and limited disposable income, these risks multiply.

How Moneylenders Can Build a Resilient Lending Business
Here are practical risk management strategies moneylenders should adopt:

1. Know Your Customer (KYC):
Collect and verify IDs, addresses, business details, and guarantors.

2. Formal Documentation:
Use written loan agreements that clearly state repayment terms and penalties.

3. Credit Scoring Systems:
Develop simple risk scoring based on income, trade history, or previous behavior.

4. Use Technology:
Tools like spreadsheets, mobile apps, or platforms like Migo or FairMoney can improve tracking.

5. Diversify Loan Portfolio:
Avoid lending too heavily to one sector or customer group.

6. Collateral or Guarantors:
Use movable assets, guarantors, or post-dated cheques for risk coverage.

7. Licensing & Legal Compliance:
Obtain a moneylender’s license under your state’s law for legitimacy and legal backup.

8. Partner for Recovery:
Work with debt recovery experts or use structured reminder systems.

Conclusion

Many moneylenders operate informally — but informality is not an excuse for poor risk controls.

Sustainability requires structure.
Growth requires systems.
Survival demands compliance.

At Soaring Law Practice, we advise informal and non-bank financial institutions on risk management, compliance, and legal structuring to ensure their businesses are resilient, scalable, and secure.

Want guidance on licensing, risk structuring, or legal protections for your lending business?

📩 Send us a message or email: [[email protected]]

08/07/2025

🤔 Are you dealing with a moneylender or a microfinance bank?

A lot of people—borrowers and small businesses alike—don’t know the difference between state-licensed moneylenders and CBN-licensed microlenders.

Here's what you should know:

👉 Moneylenders are licensed by states. They can’t take deposits and usually only lend within that state.

👉 Microlenders, like microfinance banks, are licensed by the CBN. They operate across states, can take savings, and are more strictly regulated.

Now here’s the kicker:

⚠️ If a moneylender begins offering services like a bank—accepting deposits, operating nationwide, or offering more complex financial services—they must be licensed by the CBN, or they risk facing legal sanctions.

So before you borrow (or lend!), make sure you know who you’re dealing with. It could affect your rights, your money, and the enforceability of any loan agreement.

Need advice or clarity? We're here to help. 📩

07/07/2025

07/07/2025

The Nigerian president recently assented to four pivotal tax-related legislations aimed at overhauling Nigeria’s long-standing, fragmented, and inefficient tax structure. These laws, collectively called the Tax Reform Acts 2025, include:

1. Nigeria Revenue Service (Establishment) Act
2. Nigeria Tax Act
3. Nigeria Tax Administration Act
4. Joint Revenue Board (Establishment) Act

Together, these laws form the backbone of what may become Nigeria’s most ambitious tax reform since independence.

https://soaringlp.com/nigerias-new-tax-era-four-landmark-acts-and-what-they-mean-for-you/

03/07/2025

LEGAL ALERT

New Tax Era in Nigeria: President Signs Four Landmark Tax Acts into Law
Date: July 2025

OVERVIEW

The President of the Federal Republic of Nigeria has signed into law four groundbreaking tax Acts aimed at reforming Nigeria’s tax system and improving revenue administration. These new legislations are intended to simplify, unify, and modernize tax processes in Nigeria for individuals, businesses, and government agencies alike.

THE NEW ACTS

NIGERIA REVENUE SERVICE (ESTABLISHMENT) ACT

Establishes the Nigeria Revenue Service (NRS) as the central authority for federal tax administration, replacing and expanding the mandate of the FIRS. It focuses on digitization, centralized taxpayer registration, and transparency.

NIGERIA TAX ACT

Harmonizes various tax laws (e.g., Company Income Tax, Personal Income Tax, VAT) into one codified regime. Introduces simplified filing for MSMEs and progressive tax measures for individuals.

NIGERIA TAX ADMINISTRATION ACT

Provides a standardized legal framework for tax assessment, audits, enforcement, appeals, and taxpayer rights. Also establishes regional tax tribunals and mandates timelines for dispute resolution.

JOINT REVENUE BOARD (ESTABLISHMENT ACT)

Creates a Joint Revenue Board (JRB) to coordinate federal, state, and local tax administrations, promote data sharing, and prevent double taxation.

KEY INNOVATIONS

Unified Taxpayer Identification System linked to BVN and NIN

Introduction of a National Taxpayer Bill of Rights

Simplified tax filing portal for MSMEs and the informal sector

New tax dispute resolution tribunals across geopolitical zones

“PayOnce.ng” – a one-stop portal for all government tax payments

IMPLICATIONS FOR INDIVIDUALS AND BUSINESSES

Individuals: Tax exemption for low-income earners; better protection against multiple taxations; defined dispute processes.

MSMEs: Tax amnesty and simplified self-assessment; zero corporate income tax for small businesses (below ₦25M turnover).

Large Businesses: Streamlined compliance, centralized filing, and digital monitoring of returns.

General Public: Greater transparency, clearer processes, and improved access to tax justice.

BENEFITS

Reduces compliance burdens, especially for MSMEs

Expands tax base while protecting low-income earners

Boosts investor confidence and ease of doing business

Increases government efficiency and fiscal coordination

POSSIBLE CHALLENGES

Implementation difficulties in transitioning from legacy systems

Potential resistance from sub-national tax authorities

Limited digital access in some informal sectors

CONCLUSION

These Acts represent a bold step toward a unified, efficient, and inclusive tax system in Nigeria. Stakeholders are encouraged to:

- Review their tax compliance strategies

- Educate themselves on their rights and obligations

- Engage legal and tax professionals to navigate the new landscape

📧 [email protected] | 📞 0813 386 9120
🌐 www.soaringlp.com

This alert is for informational purposes only and does not constitute legal advice.

13/06/2025

In Nigeria, the regulation of mergers, acquisitions, and takeovers has undergone significant reform over the years. The introduction of the Federal Competition and Consumer Protection Act (FCCPA) in 2018 marked a turning point by establishing the Federal Competition and Consumer Protection Commission (FCCPC), which took on a major role in overseeing market competition — including corporate combinations. However, this created confusion as the Securities and Exchange Commission (SEC) had traditionally played this regulatory role under the Investment and Securities Act, 2007 (ISA 2007).
With the recent passage of the Investment and Securities Act 2025 (ISA 2025), this overlap has been clarified. This article aims to explain in simple terms which regulator oversees what, especially concerning publicly quoted and private companies, and how sector-specific regulators fit into the picture.
https://soaringlp.com/nigerias-investment-and-securities-act-2025-ushering-in-a-new-era-of-investor-protection-and-market-innovation/

13/06/2025

Nigeria’s investment landscape just experienced a major upgrade. In a significant move aimed at modernizing the country’s financial markets, the President recently signed the Investment and Securities Bill into law—officially known as the Investment and Securities Act, 2025 (ISA 2025). This new law replaces the old Investment and Securities Act, 2007 (ISA 2007) and introduces wide-ranging reforms that will shape how investments are managed and protected in Nigeria.
Whether you're an experienced investor, a business owner, or someone simply curious about how financial systems work, the ISA 2025 is a game-changer worth knowing about. Here’s what you need to know—and why it matters.
https://soaringlp.com/nigerias-investment-and-securities-act-2025-ushering-in-a-new-era-of-investor-protection-and-market-innovation/