By Onaolapo Olalekan Oduola
A dispute over the repayment of a digital loan has raised questions about the calculation and disclosure of interest, fees and restructuring terms by FairMoney, following a complaint by a Nigerian borrower.
The borrower, Chukwuemeka Peter Madunagu, is seeking clarification over how an original loan of approximately ₦1.3 million reportedly resulted in a repayment obligation of about ₦6.8 million after he obtained an additional ₦500,000 top-up.
The matter has also raised questions about whether the circumstances warrant regulatory attention from the Central Bank of Nigeria (CBN) and the Federal Competition and Consumer Protection Commission (FCCPC).
According to Madunagu, he had already repaid ₦442,868 on the original facility before obtaining the additional ₦500,000.
In its response to the complaint, however, FairMoney reportedly stated that the original facility carried a monthly interest rate of 13.18 per cent, while the subsequent top-up attracted a monthly interest rate of 20.14 per cent.
The lender said the restructuring resulted in a total repayment obligation of ₦6,814,076.
Questions Over the Loan Calculation
The major issue in the dispute is not simply the amount borrowed, but how the outstanding balance was calculated after the top-up and restructuring.
Where a borrower disputes a repayment obligation running into millions of naira, a detailed breakdown is essential. Such a breakdown should ordinarily show the original principal, payments already made, interest accrued, applicable fees, the additional amount borrowed, restructuring terms and the outstanding balance.
Providing such information would enable the borrower, and where necessary the relevant authorities, to independently understand how the final figure was reached.
The dispute therefore raises a broader question about transparency in Nigeria's rapidly expanding digital lending industry.
Regulators May Need to Examine the Matter
The circumstances could provide an opportunity for the relevant regulatory authorities to examine the lending and restructuring practices involved, particularly if the borrower maintains that the amount demanded is inconsistent with the terms he accepted.
Any regulatory examination could consider the original loan agreement, subsequent top-up agreement, repayment records, loan statements, interest calculations, applicable charges, discounts and the information presented to the customer before and after the restructuring.
The FCCPC's Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations 2025 were introduced against the background of growing concerns about consumer protection and transparency within Nigeria's digital lending sector.
The broader regulatory objective is to ensure that consumers receive adequate information about the terms and financial consequences of credit facilities.
Against that background, disputed loan balances involving substantial sums deserve clear explanations based on documentary records.
An Automated Calculation Does Not End the Question
Digital lending platforms rely extensively on automated systems to calculate interest, repayments and outstanding balances.
However, the fact that a figure was generated electronically does not, by itself, resolve a dispute over whether the calculation is correct.
For a borrower questioning a repayment obligation of ₦6.814 million, what is required is a verifiable explanation of how the amount was generated.
A transparent loan ledger or amortisation schedule could show:
- The original principal borrowed;
- Interest charged on the original facility;
- Payments made by the borrower;
- The amount of the top-up;
- Interest and other charges applicable to the top-up;
- Any restructuring or rollover terms;
- Discounts or adjustments applied; and
- The final outstanding balance.
Such documentation would allow all parties to determine whether the amount demanded corresponds with the contractual terms.
FairMoney Has an Opportunity to Clarify
The controversy also places attention on the management of FairMoney, including its chief executive officer, Laurin Nabuko Hainy.
As a significant participant in Nigeria's digital lending market, FairMoney has an opportunity to address the concerns by providing a clear explanation of the disputed calculation and the contractual basis for the final repayment figure.
If the ₦6.814 million figure is supported by the applicable loan agreements and transaction records, a detailed statement of account should be capable of demonstrating how the obligation was accumulated.
Conversely, if an independent review establishes that the calculation does not correspond with the agreed terms or applicable regulatory requirements, the appropriate corrective measures would need to be considered.
FairMoney should also be given an opportunity to respond fully to the borrower's allegations and provide any documents necessary to clarify the dispute.
What the CBN and FCCPC Could Establish
The case could test how effectively existing consumer-protection safeguards operate within Nigeria's digital lending sector.
The relevant authorities could, where appropriate, examine whether the interest calculations, fees, restructuring arrangements and disclosures complied with applicable requirements.
They could also establish what information the borrower received before accepting the original facility, what information was provided before the top-up, what contractual changes occurred during restructuring and how the final repayment obligation was calculated.
Such clarification would not only address the individual dispute but could also provide useful guidance to other Nigerians who rely on digital lending platforms for emergency financing and short-term credit.
Transparency Must Remain Central to Digital Lending
Digital lending has expanded access to credit for millions of Nigerians who may otherwise struggle to obtain conventional bank loans.
But easier access to credit must be accompanied by clear terms, understandable pricing and transparent repayment calculations.
In Madunagu's case, the difference between an original facility of approximately ₦1.3 million and a stated repayment obligation of ₦6.814 million is significant enough to warrant a clear documentary explanation.
At the heart of the dispute is therefore a straightforward question:
Can every naira contained in the disputed ₦6.814 million repayment obligation be clearly explained, documented and reconciled with the terms accepted by the borrower?
The answer to that question should ultimately come from the loan agreements, transaction records and, where necessary, an independent examination by the appropriate authorities.
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