We did this post a while back but we are bringing it back as a reminder to you!!!

Deji, Biola’s friend of 8 years has agreed to advance him a loan of N10million for his business, to be repaid in a year with an additional interest of 30%.

These types of agreement are commonplace in our society, but do you know that they can be illegal!

Yes! The law is that only designated money lenders can advance money to borrowers to recover both the principal sum and any interest accrued. Any other person, not licensed as a designated money lender can only be entitled to monies had and received at best.

Moneylenders are licensed by the relevant government authority by Money Lender Licenses and their operations are regulated by the Money Lending Law of the various states in Nigeria.

Deji will therefore only have a chance of a legal remedy for the interest in cases of default, if he possesses a valid License, otherwise the contract is illegal and unenforceable.

This is why it’s important to know the legal framework of any agreement before executing it, one reason you need legal guide.

Reach out to us today for your drafting and document reviews. Send us a message or visit our website at www.businesslegal.ng