How airtime lending became telcos’ multi-billion naira goldmine

…As regulator widens regulatory net, eyes consumer protection

In 2024, Samuel Ojimba travelled from Lagos to Zamfara.

While in a local community, gunshots suddenly rang out, sending everyone fleeing for safety.

Hiding from the chaos, he tried to quietly call his hotel but had no airtime and could not immediately recharge from his bank.

He quickly borrowed an airtime from one of the telecom companies, getting it in just 22 seconds.

That proved to be a life saver as a vehicle carrying armed security officers arrived 15 minutes later and escorted him back to his hotel.

Nigeria’s telecom operators have turned airtime and data lending into one of the country’s most lucrative digital services, a multi trillion-naira business.

In 2023 alone, mobile networks issued 46 billion airtime and data advances valued at N1.4 trillion, according to Nigerian Communications Commission (NCC) data.

MTN, the market leader, has disbursed over N2.8 trillion in such loans since inception, in partnership with South African-owned Nairatime Holding Limited, splitting revenue 75:25 in its favour.

Airtime and data lending helped to push Airtel Nigeria’s earnings to $298 million from data and voice revenue between January and June 2025. The industry is valued at over N3 trillion.

With a flat 15 percent service fee per transaction and default rates as low as 4.64 percent, the airtime credit business has become a cash machine for operators, largely untouched by banking regulations. Airtime loans are typically repaid automatically from a customer’s next recharge, making defaults rare and margins high.

With Airtel’s Extra Credit, Glo’s ‘Borrow Me Credit’ and MTN’s Xtratime, Nigerians that run short of airtime or data can borrow mow and pay later.

It is convenient and saves lives and time.

But the days of unchallenged growth could be numbered. The Federal Competition and Consumer Protection Commission (FCCPC) has issued the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025, a sweeping reform designed to open the market, enforce transparency, and protect borrowers’ data.

It is a market that is eyed that fintechs who are trying to woo consumers across the board.

Telcos’ goldmine

For telcos, the airtime lending model has been a near-perfect business: high frequency, low risk, instant repayment, and zero collateral. It also fuels customer retention, as subscribers tied to loan repayment are less likely to switch networks.

But with local fintechs poised to enter the market, mandatory credit data sharing, and tighter consumer protections, that goldmine could face erosion.

“Digital lending is no longer an unregulated side hustle. It is part of the financial system, and it is going to be treated that way,” said Adedeji Olowe, founder of Lendsqr

Regulatory scrutiny

Federal Competition & Consumer Protection Commission (FCCPC) is enforcing new rules through the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025.

Under the new rules, repayment data must be shared with recognised credit bureaus in line with the Nigeria Data Protection Act 2023. The Act prescribes punishment for unethical behaviour and moves to put the kibosh on illegal activities.

Advocates say this could help borrowers build credit histories and transition to larger bank or microfinance loans.

“This regulation is not just about curbing exploitation; it is about recognising the financial behaviour of millions. If you have been repaying airtime loans for years, that should count when you apply for a business loan,” said Ifeoma Okoye, an economist.

For years, the business has been dominated by a handful of foreign-linked intermediaries. In MTN’s case, Nairatime has enjoyed an exclusive role in airtime lending activation, effectively locking out local fintechs from a high-margin market. The new rules will checkmate that.

“The monopoly has stifled innovation, inflated consumer costs, and denied Nigerian companies a fair shot. The FCCPC’s move is long overdue. We need a level playing field,” said Chika Agu, an economist.

Deolu Ogunbanjo, president of the National Association of Telecommunication Subscribers (NATCOMS), hailed the new regulations as a win for Nigerian enterprise.

“This one is a very good thing for Nigerian businesses. It will definitely promote inclusion, particularly encouraging our local investors in the industry. It is a very good one,” Ogunbanjo told BusinessDay.

Tougher consumer safeguards

The FCCPC reforms also ban pre-authorised lending without explicit consent, mandate clear disclosure of fees, and require disputes to be resolved within 48 hours.

Penalties are steep: companies face up to N100 million or one percent of turnover for violations, while directors can be held personally liable. Existing operators have 90 days to comply, with licensing fees set at N1 million for mobile money operators such as MTN’s MoMo and Airtel’s SmartCash.

Gbemi Adelekan, president of the Money Lenders Association, welcomed the reforms but warned they could raise costs for providers, potentially influencing pricing and consumer behaviour.