Money lending business is one service whose demand will continue to be on a high in the Nigerian financial industry. According to Statistics, a large percentage of Nigerians are poor. And because of the high level of poverty in the country, most people rely on borrowing from those who have to feed and take care of other human needs.
Apart from poverty, the growing numbers of small business which, obviously, do not have enough finance to run in full capacity, rely also on borrowing to continue their operation. The two problems highlighted herein provide a very good business opportunity for you to tap into. But before you begin, you need to know how to start a money lending business in Nigeria.
What amount of money needed to start money lending business in Nigeria?
Before you begin a money lending business, you need to raise a capital of not less than N20 million to be able to run the business effectively.
The reason for this is that, as a money lender, you might need a lot of money before your profit can start trickling in. it is for this reason that you need to have sufficient capital to take care of the running cost at the beginning.
How to register money lending business in Nigeria
In Nigeria, registering a new business essentially follows the same process as registering with the Corporate Affairs Commission. Since we are in the age of technology, meanwhile, majority of the process can be done at your convenience, on the internet. And your first point of call should be Corporate Affairs Commission’s website at https://www.cac.gov.ng/.
The followings are the information you need to provide:
- Company name reservation
- Payment of filing and stamp duty fees
- Uploading of requested documents, which includes: CAC1.1, MEMART, Form of Identification for directors and Secretary.
- Proficiency certificate
- Stamp duty certificate
- Evidence of CAC payment
- Last, you will need to submit the original of those documents to any official CAC office.
For a money lending business registration, you have to complete the following processes:
Procedure 1:
Apply to the magistrate court. But before then, ensure you have the following documents:
- Application letter
- Certificate of incorporation
- Tax and police clearance
- Memorandum and articles of association of your company
- Evidence of maintenance of a current bank account
- Certified copies of the CAC form 2 and 7
If approval is granted, the magistrate court registry will issue you a letter and Form B of the money lending ordinance to proceed.
Procedure 2:
Apply to the Ministry of Home Affairs and Tourism through the following steps:
- Payment of N10,000 to purchase the money lender certificate.
- Collect an invoice of N50,000 from the Ministry
- Finally, apply with the following documents: Form B and Form C from the Magistrate court, Evidence of payment of application fees, Certificate of incorporation, Police report from the commissioner of police, PAYE certificate, and A 3-year income tax clearance certificate
Procedure 3:
This is the point where visitation and inspection of your business office by the ministry comes in. once and you are successful, you will be given your Money Lending Permit. Again, for extra preparations, you can acquire the following:
A money lending operational manual
Arrange all the necessary forms and documentation necessary in the money lending process.
A good electronic system for fast and responsive loan giving process.
Get a good rule of thumb to seek legal help. Involve other professionals, too. This is because beginning this kind of business needs know-how.
Finally, aside the registration level, operating a money lending business involves good management and strategy. While this piece does not discuss that, you should get them in place. For so much as you have all the obligatory documents, registering a money lending company in Nigeria is easy.