The Central Bank of Nigeria according to the powers conferred on it by Section 28 of the Central Bank of Nigeria Act and Section 56-61 of the Bank and Other Financial Institutions Act, issued revised guidelines to regulate the establishment, operations, and other activities of Finance Companies in 2014.


A finance company, unless otherwise stated, means a person or company licensed to carry on finance company business. Finance Company Business means the business of providing financial services for consumers and to industrial, commercial, or agricultural enterprises. Such services include:

1.      Funds management;

2.      Equipment leasing;

3.      Hire-purchase;

4.      Debts factoring and securitization;

5.      Project financing or consultancy;

6.      Debt administration;

7.      LPO financing;

8.      Project financing;

9.      Export financing;

10.     Financial consultancy; and

11.     Issuing of vouchers, coupons, credit cards, and token stamps and such other businesses as the CBN may, from time to time, designate.


Any person seeking a licence 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 N10,000.00 [ten thousand Naira only] in bank draft, payable to the Central Bank of Nigeria.

2.      Deposit of the minimum capital of N20 million (Twenty million naira only) in bank draft made payable to the CBN. The capital thus deposited together with the accrued interest will be released to the promoters on the grant of the final licence.

3.      Satisfactory, verifiable, and acceptable evidence of payment by the proposed shareholders of the minimum capital of N20 million.

4.      A copy of a detailed feasibility report disclosing information that will include:

i.       The objectives and aims of the proposed finance company.

ii.      The need for the services of the finance company.

iii.     The special services that the finance company intends to provide.

iv.      The branch expansion programme [if any] within the first five years.

v.      The proposed training programme for staff and management succession.

vi.      A five-year financial projection for the operation of the finance company, indicating its expected growth and profitability.

vii.     Details of the assumptions upon which the financial projection has been made.

viii.    The organizational structure of the finance company, setting out in detail, the functions and responsibilities of the top management team.

ix.      The composition of the Board of Directors and the curriculum vitae of each member including other directorships held [if any].

x.      The conclusions based on the assumptions made in the feasibility report.

5.      A copy of the draft Memorandum and Articles of Association.

6.      A letter of intent to subscribe to the finance company, signed by each subscriber.

7.      A copy of the list of proposed shareholders in tabular form, showing their business and residential addresses [not post office addresses], and the names and addresses of their bankers.

8.      Names and curriculum vitae (CV) of the proposed members of the Board of directors. The Cvs must be personally signed and dated. The documents/items under paragraph (d) above.

9.      No proposed finance company shall incorporate/register its name with the Corporate Affairs Commission until written approval has been communicated to the promoters by the CBN, a copy of which shall be presented to the Corporate Affairs Commission.

10.     In considering an application for a licence, the Bank shall require to be satisfied as to the following;

  • The Minimum paid-up capital of N20 million is acceptable and the source is verifiable, satisfactory, and acceptable.
  • The quality of the management of the proposed company. The promoters would be required to submit the names and curriculum vita (cv) of the proposed top management team. The CVs must be personally signed and dated.
  • The earnings prospect of the company.
  • The objects of the company as disclosed in its Memorandum and Articles of Association which should agree with the services listed in the provisions of Section 1 of these Revised Guidelines.

11.     Thereafter, the Governor may grant a licence to a finance company.

12.     The CBN may at any time vary or revoke any conditions of a licence or impose additional conditions.

13.     Where a licence is granted subject to conditions, the finance company shall comply with those conditions to the satisfaction of the CBN within such a period as the CBN may deem appropriate in the circumstances.


1.      The maximum number of directors on the Board of a finance company shall be seven while the minimum shall be three. To qualify for the position of a director in a finance company, it is hereby required that the person(s) must not be current employees or directors of banks or other financial institutions, except the finance company is promoted by the banks or other financial institutions and are representing the interest of such institutions. In circumstances, however, where current directors or employees of banks or Other financial institutions are proposed for the position of Director, the consent of their employers must be given in writing to the CBN.

2.      The appointment of new directors must be preceded by CBN’s approval.


The following minimum qualifications and experience are mandatory for officers who may occupy the key/top management positions in the finance company.

1.      Managing Director/Chief Executive – a recognized university degree or professional qualification with at least 7 years of post-qualification experience in relevant fields.

2.      Departmental Head – a recognized university degree or professional qualification with at least 5 years of post-qualification experience in relevant fields.

3.      Support staff – shall be qualified and be of proven ability.

4.      A person with any other qualifications or experience that may be considered adequate by the CBN can hold any of the positions [i], [ii] and [iii] within the organization.


1.      The promoters of a finance company shall submit the following documents to the CBN before such finance company is permitted to commence operations:

a.       A copy of the shareholders’ register in which the equity interest of each shareholder is properly reflected [together with the original for sighting].

b.      A copy of the share certificate issued to each shareholder.

c.       A certified true copy of Form C02 [Return of Allotments] filed with the Corporate Affairs Commission.

d.      A certified true copy of Form C07 [Particulars of Directors] and written confirmation that the Board of Directors approved by the CBN has been installed.

e.       A certified true copy of the Memorandum and Articles of Association filed with the Corporate Affairs Commission.

f.       The opening statement of affairs audited by an approved firm of accountants practising in Nigeria.

g.      A certified true copy of the certificate of incorporation of the company [together with the original for sighting purposes only].

h.      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 CBN has been put in place.

i.       A letter of undertaking to comply with all the rules and regulations guiding the operations of finance companies.

j.       Evidence of registration with the finance company’s association umbrella body.

2.      The finance company shall inform the CBN of the location and address of its Head Office.

3.      The finance company shall be informed in writing by the CBN that it may commence business after physical inspection of its premises.

4.      The finance company shall inform the CBN in writing of the date of commencement of business.


To recapitulate, it is compulsory for every company desiring to be licensed as a finance company to be a stand-alone and therefore, be strictly limited to solely engaging in finance company businesses as stated in the body of the article.