How to Become a Licensed Money Lender is discussed in this article with requirements listed and explained for your perusal.
What license do you need to lend money
According to Section 2 of the Lagos state money lenders laws, a money lender is defined as “Every person whose business is that of money lending or who carries on or advertises or announces himself or holds himself out in any way as carrying on that business whether or not that person also possesses or earns property or money derived from sources other than the lending of money and whether or not that person carries on the business as a principal or as an agent”. This article will be focused on how to become a licensed money lender.
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1. The company must be a certified licensed money lender and must be regulated by the financial body
Also, becoming a licensed money lender indicates that the lender can loan any value of money subject to the share capital of the company if there is no nonentity in the nature of the transaction that disrupts the laws and guidelines of institutions controlled by the agencies that regulate the financial market such as the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).
2. The company must be recognized by the agency of Government
Aspect from just having the money lender’s certificate and license, it is important that in order to become a licensed money lender, the company should be recognized by the State Government agency. This recognition is considered very vital and lawful.
3. The company must be a licensed and certified company
In Abuja, any of the Magistrate Courts in Abuja will grant both the license and certificate to a money lender but in Lagos, the certificate is granted by a Magistrate Court whereas the license is given by the Ministry of Home Affairs. The case may differ depending on the state but the ultimate item is for the company to be certified and issued a license.
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4. The company must have a registered address
The company should have a registered address where monetary complaints and various financial issues can be sorted out in a few days or a few weeks as the case may be.
5. The company must be willing to operate with a technological structure
The world is becoming more technologically advanced than ever before, any exclusive and licensed money lender must be willing to operate rapidly and globally.
Thus, with the use of technology, it becomes quite interesting to operate from a constructed environment but still deliver excellent business services to potential customers.
Also even from the company’s residents, services can still be delivered in other nations or countries across the world. This makes the company not only digital but also competent, making lending excellent.
6. The company must be registered with the CAC
When a company that chooses to become a licensed money lender must be registered as a company with the CAC and must satisfy the necessary conditions.
One of the financial conditions of a limited liability company especially when it is classified as private is that the company is only entitled to a share capital of not less than twenty million naira and at least two (2) adult directors.
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7. The structure of the company
The company should be willing and decide whether to operate as a private limited liability company or as a public limited liability company.
8. The company must satisfy the CAC requirements
Many licensed money lenders operate as private limited liability companies and are entitled to the following requirements as stated by the law.
These requirements include two intended names for the company for CAC’s name screening and approval, an intended registered address, email and recognized phone number of the company in Nigeria, names, resident address, email address, phone number, an electronic signature(s) and means of identification of the shareholders, directors and company’s secretary where necessary.
9. The share structure of the company must be well known
The amount of share capital must be stated as the minimum share capital of a money lender company is not permitted to exceed 20 million naira rated in share capital. The distribution of the company’s shares among the shareholders and the names of individuals must be made public.
10. The company must have a copy of the company’s Memorandum and Articles of Association
A copy of the company’s Memorandum and Articles of Association must be available. This document cannot be duplicated as the CAC has a generic MEMART for all registered companies.
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Conclusively, in order to become a licensed money lender, the company must satisfy all requirements of the CAC and must be willing to deliver exclusive and excellent lending services to the clients.