Borrowing airtime or data when your account hits zero is a luxury many Nigerians have overlooked. Whether it’s making an urgent call when your balance runs out, buying a small data bundle before payday, or staying connected in an area with limited banking access, airtime advances have quietly become part of everyday life.
That is why many subscribers were caught off guard when some airtime borrowing services suddenly became unavailable in recent weeks.
What began as a government effort to regulate predatory digital loan apps has evolved into a wider dispute involving telecom operators, technology providers, regulators, and the courts. Along the way, it has raised questions about consumer protection, market competition, and the future of one of Nigeria’s most widely used digital services.
So what exactly is happening?
What is DEON, and why was it introduced?
The current dispute can be traced back to the Federal Competition and Consumer Protection Commission’s (FCCPC) Digital Economy and Online Consumer Lending (DEON) Regulations 2025.
The FCCPC initially drafted DEON to clamp down on predatory, unregistered digital loan apps (loan sharks) that use defamatory tactics, harass borrowers, misuse personal data, and engage in abusive debt collection practices.
Many Nigerians who used these loan apps reported being asked to grant access to their contacts, photos, and location data before receiving loans. Some operators were also accused of contacting borrowers’ friends and family members when repayments were delayed.
In response to mounting complaints, the FCCPC and several government agencies, including the ICPC, NITDA, and CBN, began investigations into digital lenders in 2022. A temporary regulatory framework was introduced the same year, requiring loan apps to register with the commission before operating.
The 2025 DEON regulations expanded this approach beyond traditional loan apps to cover a broader category of digital, electronic, online, and non-traditional consumer lending services. The regulations are designed to set standards and compliance requirements for consumer lending providers operating through digital channels.
Victoria Fakiya – Senior Writer
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Many, however, still assume the reform simply means loan apps must register. In reality, the framework aims to establish a formal approval process that requires lenders to submit corporate, operational, and compliance documentation before they can continue operating. The FCCPC also tied approval to continued access to app stores and payment infrastructure.
Why did airtime and data lending suddenly become part of the conversation?
Under the DEON framework, the FCCPC classifies airtime and data advances as a form of consumer lending. Its scope was broadly defined to cover all digital, electronic, online, or non-traditional consumer lending.
The commission argues that when a subscriber dials a USSD code (*606# or *500#) to advance airtime and repays it later upon their next recharge, that transaction is fundamentally a micro-loan. Because of this classification, the technology companies that power airtime and data advances would be required to register under the new framework and comply with additional regulatory requirements, including strict data-sharing protocols and hefty oversight fees.
For many people, airtime borrowing appears to be a simple telecom service. The telecom service, however, is powered by invisible backend Value-Added Service (VAS) aggregators such as Creditswitch. These firms build the credit-scoring systems that determine who qualifies for advances, provide the infrastructure that delivers the credit instantly, and absorb much of the risk when customers fail to repay.
Once the new rules were introduced, many of these providers argued that their operations would become significantly more expensive and complicated.
The issue moved into the public spotlight when major mobile network operators, including MTN, Airtel, and Glo, suspended some airtime borrowing services rather than immediately adapting to the new requirements.
Instantly, an estimated 40 million active Nigerian subscribers (mostly lower-income, prepaid users) found themselves locked out of emergency credit.
Why did the dispute become so intense?
The conflict escalated into a massive economic dispute when reports emerged that the reform had been presented to the Presidency as a way to address what was described as a foreign-dominated monopoly in Nigeria’s airtime lending market.
According to those reports, the market was valued at roughly ₦3 trillion annually, alongside claims that a single foreign-linked provider held disproportionate control over the sector. The reports also suggested that the government wanted to open the market to more indigenous technology companies.
However, telecom operators and analysts immediately flagged a massive data mismatch. The Association of Licensed Telecoms Operators of Nigeria (ALTON) stepped forward to present the audited reality: the entire airtime credit ecosystem in Nigeria is actually worth between ₦300 billion and ₦400 billion annually.
The regulator’s ₦3 trillion valuation outpaced industry figures, prompting a broader debate. The companies that provide the infrastructure behind airtime and data advances did not simply accept the new rules.
Represented by the Wireless Application Service Providers Association of Nigeria (WASPAN), they challenged the FCCPC in court. The lawsuit (Suit No. FHC/L/CS/760/2026) was filed at the Federal High Court in Lagos.
The association argued that its members are already licensed and regulated by the Nigerian Communications Commission (NCC) and that the FCCPC’s rules create overlapping regulatory obligations. The FCCPC says the services fall within consumer lending and, therefore, are under its authority.
In April 2026, the Federal High Court in Lagos granted an interim injunction preventing the FCCPC from enforcing key provisions of the regulations against WASPAN members pending the hearing of the case. The FCCPC later attempted to have the injunction lifted, but the court declined. As a result, the commission announced on May 22, 2026, that enforcement of the disputed provisions would be suspended pending further legal proceedings.
While fielding questions from journalists in May 2026, Tobe Okigbo, Chief Corporate Services and Sustainability Officer, MTN Nigeria, declined to comment on the matter, insisting that it would be remiss of him, as a lawyer, to do so while a matter is before the courts.
“It’s a question I can’t answer because the matter is in court,” Tobe notes, “I’d wait to see what the courts would say.” When pressed about the interim injunction, Tobe maintained that the fact that there’s an interim injunction does not mean that the matter has been resolved.
While the FCCPC publicly announced the enforcement freeze, reports claimed the regulator was still moving behind the scenes to expand its approved list of operators from five to nine firms, trying to commercialise a regulatory regime that was actively suspended by a federal court.
However, the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, issued an emergency public statement completely distancing the commission from reports that it had submitted local fintech names to the Presidency in a bid to restructure the market. He emphasised that the agency is bound by the court order until the main case is resolved.
What does this mean for the average Nigerian?
While regulators, tech associations, and lawyers trade blows in court, the real casualties of this operational freeze are everyday Nigerian consumers and the broader digital financial infrastructure.
Many Nigerians rely on airtime and data advances as a fallback when they temporarily run out of credit. This is especially important for prepaid subscribers, people living in areas with limited access to digital banking services, and workers in the informal economy who often depend on constant connectivity to earn income.
A trader receiving orders through WhatsApp, a delivery rider navigating with mobile data, or a small business owner processing mobile money transactions can all be affected when they suddenly lose access to emergency airtime or data. For these users, airtime advances are not merely a convenience. They are part of the infrastructure that keeps daily economic activity moving.
For a prepaid user who runs out of airtime or data in the dead of night, in a rural area, or during a medical emergency, dialling a quick USSD code is often the only option to stay connected. Taking away that bridge means that when your balance hits zero, you are entirely cut off until you can find a physical voucher vendor or a stable internet connection to use a banking app.
A vast portion of Nigeria’s economy operates in the informal sector—market traders, delivery riders, artisans, and small business owners. For these workers, airtime advances function as short-term business capital.
Traditional commercial banks are structurally incapable of processing millions of real-time microloans worth less than a dollar. It requires the high-velocity, low-latency infrastructure of telecom networks and specialised VAS credit engines to score users based on behavioural data and disburse advances instantly.
What happens next?
For now, the dispute remains unresolved. Because the Federal High Court stepped in to halt enforcement of the DEON rules, the system is currently under a temporary truce until the major hearing on July 20, 2026.
The immediate danger of a total, permanent blackout of airtime borrowing has faded for now, but uncertainty remains.
For the average citizen, it means navigating an ecosystem caught between wanting protection from unfair fees and hidden costs, but desperately needing the seamless, friction-free convenience of borrowing a quick N200 to stay connected to the digital world.
