10 Requirements for Money Lending License are listed and explained one by one in this article for your perusal.
The Central Bank of Nigeria (CBN) License is not allowed by law to act directly as a money lending company rather the CBN Finance Company License can be used in lieu of a money lending license to involve in consumer lending obligated to engage in money lending in Nigeria.
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A money lending license is issued to a lending company that intends to involve in consumer and commercial lending in Nigeria.
As contained in Nigerian law, it is a legal crime to engage in a money lending business without a lending license issued by the government and one must have justified and fulfilled the requirements needed.
It is interesting to note that Section 2 of The Lagos State Money Lenders Laws defines, Money Lending 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”;
According to the law or as stated in the law, this excludes;
Society registered Cooperative Society Law, statutory corporation empowered by law to lend money, banks or insurance companies or other licensed business which lends money in the course of its operations; and licensed pawnbroker.
The Requirements for Money Lending License by a Company are highly listed below;
1. Cover letter with the business’ seal
First of all, the company should develop a cover letter with the business’ seal and signatory affixed to the cover letter.
2. Prove to uphold or continue an office
In order to obtain a money lending license, the company should have proof of upholding or continuing an office. This requirement is essential to avoid the company from shouting down at any slightest time coupled with the fact that it is a business that involves the monetary value of the public.
3. Incorporation documents
Also, for further inspection, the company will be required by law to have completed all documents and must have been licensed with an original copy of all incorporation documents necessary for certification.
4. Certificate of Incorporation license
A certificate of Incorporation showing the license to operate as a money lending license will be required.
5. Tax clearance certificate
A proof of tax clearance certificate for the business. This will require a representative who will act as a frontier. In a situation where the company is newly established or newly listed, then the company will be required to present a shred of evidence showing that the business is really a registered taxpayer.
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6. A three-year tax clearance
Aspect from the evidence of being a taxpayer, the company will also have to present an essential document showing a three-year tax clearance for not less than two directors of the business.
7. Police Clearance Certificate
Another requirement is simply a Police Clearance Certificate for two directors of the company to justify that the company previously does not have any intention, pending a case with the police. If any is dictated, the license can be withdrawn with immediate effect until such cases are cleared.
8. Reference letter
Reference letter from a business bank to serve as a guarantor to the company.
9. Company’s logo
The logo or symbol of the company will be required for a money lending license as well
10. Evidence of payment of renewal fee.
Another important requirement is Evidence of payment of the renewal fee.
Once the requirement for a money lending license is curtained and accomplished, renewal of the license becomes very easy.
The company will simply need to document an application stating its purchase for renewal, obtain a moneylenders ordinance (form B) from Magistrate Court, present a duly completed as well as endorse (form C) from the Chief Magistrate court, show proof of the previous license issued.
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Other certifications that are essential and will be demanded are tax clearance which should be up to date, and payment of renewal fee (to be sure that all monetary issues have been meant). Then an inspection will be carried out to ensure that the company is in existence and is duly functional.