Regulatory and Legal Implications of Consumer Credit in a Cashless Financial System in Nigeria

This study examines consumer credits in a cashless economy, addressing issues arising, their impact, and the prospects for the future, with specific regard to Nigeria. The paper is borne out by the desire to unearth the availability of consumer credits in a cashless economy, their inhibitions, and prospects for the future. The research method is doctrinal, and the analytical process of findings is descriptive. The work found that financial entities offer loans to individuals and businesses through digital channels such as mobile apps. However, the development of consumer credit in a cashless economy is inhibited by factors such as a high level of illiteracy among individuals, especially in rural areas, non-familiarity and lack of required technological skills to operate technological devices, and the failure to exercise self-control by consumers when purchasing items increases their debt profile. Regulatory frameworks have been designed to protect and safeguard credit consumers from potential exploitation by digital financial entities. These frameworks also guide the operations of digital lending platforms, aiming to ensure transparency in their practices. In light of these circumstances, it is recommended that emphasis be placed on fostering financial self-awareness among consumers seeking credit. Consumers are advised to exercise prudence in utilising credit for essential purchases of goods and services. It was proposed that banks consider waiving transaction fees to promote the adoption of cashless transactions among unbanked consumers. Additionally, prioritizing consumer awareness is essential to ensure that individuals are well-informed about the pertinent details of the credit facilities they intend to purchase.