By Funmilayo Olagunju
|
The mere fact that a person lends money not as his business or that he lends money to a friend or an acquaintance does not make him a money lender within the contemplation of the Money Lenders Law.
See the case of EREMERUWOU v. OBIBILAGBA (2021) LPELR-56724(CA)
The Money lenders Law of each State defines a Money lender after the Money Lenders Act was repealed. It is pertinent to note that Banks and insurance are broadly excluded from the scope of Money lender Law as they are regulated by Bank and other financial institution Act.
The issuance and regulation of Money Lenders license is subject to the money lenders laws of the various states in Nigeria. The Money lender license grants an individual or company the ability to carry on business of money lending in the state within which it is established.
The Money lender license is only effective for use in the State in which it is acquired and doesn’t have a National jurisdiction. That is to say that a license acquired in one State cannot be used for operation in another State.
Engaging in the Business of money lending without a Money lenders license is detrimental. In the case of SULEIMAN v. JIMBASH NIGERIA LTD & ANOR (2014) LPELR-24615(CA), it was held that where a person carries on business as a money Lender without possessing the necessary licence, the transaction he enters into is illegal, void and unenforceable.
A good number of Thrift collectors and similar business do engage in the act of money lending with intent to receive with interest. When such person or corporation seek redress in a civil Court for debt recovery, they’re caught in the web of Money lender license which they don’t possess. Registration or incorporation with the Corporation Affairs Commission is not a substitute for Money lender license.
