Nigeria though a developing nation has experienced the massive growth of Artificial Intelligence [AI] in almost every industry. More particularly, AI is increasingly becoming embedded in Nigeria’s financial-services ecosystem, especially in fraud detection, customer onboarding, risk modelling and credit assessment.
While Nigeria has no standalone artificial intelligence statute, and with none in view to address the growing AI concerns especially as it pertains to people’s rights, the Nigeria Data Protection Act 2023 [NDPA], the NDPA General Application and Implementation Directive 2025 [GAID], and the FCCPC’s Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025 [“DEON Regulations”] serve as guides and regulators to the use of AI to limit the breach of people’s right and to ensure fairness especially fair lending in the financial eco-system.
AI deployment in high-impact sectors such as finance raises concerns relating to ethics, bias, transparency and privacy, and it is very important that a human-centred approach is adopted to ensure that AI systems are fair and accountable.
Sections.17, 18, & 163 of the Federal Competition and Consumer Protection Act [FCCPA] 2018 provides for the functions and Power of the Federal Competition and Consumer Protection Commission to make regulations to protect consumers’ interest and ensure market fairness.
The FCCPC have therefore established the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025 [DEON Regulations] to regulate AI-assisted lending including any lending to consumers either by way of cash, airtime, data, cashback, services, barter in exchange for specific or verifiable monetary value, wherever the transaction occurs by digital, electronic, online, or non-traditional means [Regulation 12 of the DEON Regulations].
Regulation 17 [a] of the DEON Regulations, 2025 provides that:
“17- To promote transparency and enhance disclosure practices in the provision of the Consumer Lending Services, the Lender/Service Provider shall ensure the following:
[a] that the terms of the Lending Service provided to the Consumer (including interest rates, repayment terms, and any associated fees) are fully disclosed to consumers before any transaction is completed, and that such terms are made available to the consumers in clear, legible and simple English Language comprehensible to the average consumer, and in such manner that shall not be misleading or deceptive;…”
Therefore, the unavailability of an AI legislation is not an excuse for unfair lending in the financial services eco-system.
Regulation 18 [a] of the DEON Regulations, 2025 further provides that:
“18- The Lenders/Service Providers shall comply with the following provisions to ensure the fair treatment of consumers-
[a] “treat each and every consumer equitably and fairly without discrimination, exploitation or bias…”
Therefore, while many financial services deploy the use of AI to ascertain the credit worthiness, they must ensure that it is not unfairly adopted to discredit prospective lenders.
The Regulations do not prohibit technological credit assessment. Infact, Regulation 19(i) expressly requires a lender, before granting credit, to “profile or assess the capability to repay in a sustainable manner” through proper credit assessment, due diligence and creditworthiness assessment.
However, this permission to assess creditworthiness is accompanied by a substantive consumer-protection constraint which is highlighted above in the provision of Regulation 18.
Consequently, an AI credit-scoring system cannot be treated merely as a technological tool whose output automatically determines the applicant’s fate. Its deployment remains subject to the lender’s underlying obligation of fair treatment.
This is particularly important because an AI model may derive a credit decision from large quantities of personal or behavioural data and identify statistical correlations which are not necessarily transparent to the applicant.
A model may therefore produce systematically different outcomes for particular groups even where discriminatory characteristics are not expressly included in the model. The legal concern is consequently not limited to whether the lender intentionally discriminated; it extends to whether the deployment of the system produces a prohibited discriminatory or biased outcome.
The GAID expressly addresses Artificial Intelligence as an “Emerging Technology”. Article 43 provides that a controller or processor deploying AI for processing personal data must consider the NDP Act, public policy and the GAID, and establish technical and organizational parameters for the processing. These parameters must take account of, among other matters, the right of a data subject not to be subject to a decision solely based on automated processes or algorithms, safeguards for vulnerable groups, and privacy by design and by default.
In conclusion, Fintech lenders should not regard an algorithmic decision as an unreviewable substitute for institutional responsibility. Where an applicant is rejected, the use of AI should not extinguish the consumer’s rights to transparency, fair treatment, complaint handling and appropriate redress. Equally, lenders should ensure that model
development, validation, deployment and monitoring are sufficiently documented to demonstrate compliance with applicable regulatory obligations.
Team Vernia
