By Joseph Erunke

The suspension of airtime credit services by Nigeria’s telecoms operators has affected an estimated 40 million active users and brought a previously invisible market to the centre of a national regulatory dispute. Public discussion has focused on the legal and political dimensions of the FCCPC’s DEON regulations, but a more basic question has largely gone unanswered: how does the airtime credit market work, who provides the service, and how does money move through the system?

WHAT IS AIRTIME CREDIT?

Airtime credit is a service that allows prepaid telecom subscribers to receive a small advance on airtime or data when their balance is low, which is automatically repaid on their next recharge.

The process takes seconds. A subscriber makes a call with a low balance or dials a USSD code; the system checks their recharge history and usage patterns; a prompt appears offering a specific amount, typically between ₦50 and ₦200; the subscriber accepts, and the airtime is added to their balance immediately. On the next recharge, the advance amount plus a service fee of roughly 15 per cent is automatically deducted.

The entire transaction occurs within the telecom network, between the subscriber’s SIM and the backend systems that assess eligibility and disburse the credit. The process requires no application form, carries no conventional interest rate, and involves no debt collection.

The service exists because prepaid subscribers, who constitute the vast majority of Nigeria’s approximately 185 million telecom users, experience frequent gaps between recharges. For the market trader who needs to call a supplier, the dispatch rider confirming a delivery, or the student submitting an assignment, airtime credit fills a gap that formal financial products have yet to reach.

WHO PROVIDES IT?

This is where public understanding of the market diverges most sharply from how it actually operates. The telcos provide the platform: the network, the USSD gateway, and the billing infrastructure. The credit assessment, disbursement, and absorption of losses when subscribers fail to recharge are handled by specialised technology companies known as Value Added Service (VAS) aggregators.

These are the firms that own the algorithms, build the scoring models, fund the float, and bear the credit risk. The major operators in the Nigerian market include Creditswitch, Fonyou, Nairtime, Avyra, and ERL Telecoms. They are not household names because they were designed to operate behind the scenes, processing millions of micro-transactions daily across multiple networks.

The commercial arrangement is straightforward. The telco earns a share of the 15% service fee while bearing no credit risk. If a subscriber fails to recharge and the advance goes unrecovered, the vendor absorbs the loss entirely; the telco’s balance sheet remains untouched. One major operator’s H1 2025 financial report attributed ₦83 billion in fintech revenue primarily to its airtime lending product: significant income for the network, while the operational and financial risk sat entirely with the vendors.

HOW IS TRAFFIC DIVIDED?

The standard industry practice is for a telco to contract with two or more vendors for the same service and split subscriber traffic between them. The division can be mechanical: odd-numbered phone lines routed to one vendor, even-numbered lines to another. It can be regional, with different vendors serving different parts of the country. Or it can be a load-balancing arrangement in which traffic is dynamically distributed based on system capacity.

This is how telcos manage VAS products globally: multiple vendors compete on the same network, each serving a portion of the subscriber base and incentivised to improve their technology and recovery rates to retain or expand their share of traffic. The market is competitive by design; every network hosts multiple vendors simultaneously, and the broader market across all four operators is served by several independent firms.

HOW BIG IS THE MARKET?

Industry estimates place the total airtime credit market between ₦300 billion and ₦400 billion annually. This figure covers disbursements across all four networks and all active vendors. According to executives with direct knowledge of the market, each vendor can disburse roughly ₦200 million in airtime credit daily, translating to approximately ₦73 billion per vendor per year in airtime alone, before accounting for data credit products.

These figures are consistent with publicly reported financial data. The ₦83 billion fintech revenue figure disclosed by one operator for the first half of 2025, when extrapolated across all four networks and adjusted for differences in subscriber base, aligns with the ₦300 billion to ₦400 billion market estimate suggested by individual data points.

Claims of a ₦3 trillion market, which have appeared in some public commentary, exceed credible industry data by roughly tenfold. No publicly available financial disclosure, regulatory filing, or independent market analysis supports a market of that size.

WHY WAS THE SERVICE SUSPENDED?

In July 2025, the Federal Competition and Consumer Protection Commission gazetted the DEON Consumer Lending Regulations, which classified any arrangement in which a consumer receives value now and pays later as consumer lending, subject to FCCPC licensing and oversight. This classification applied to airtime credit, requiring VAS aggregators to register as licensed consumer lenders and to comply with the full DEON framework, including disclosure requirements and third-party lending structures.

On 2 April 2026, the FCCPC issued an enforcement directive demanding immediate compliance. Faced with the weight of that directive and the regulatory uncertainty it created, all four mobile operators suspended their airtime and data credit services. The FCCPC has maintained that these were voluntary commercial decisions by the operators.

In response, the Wireless Application Service Providers Association of Nigeria (WASPAN), the industry’s official non-profit trade body representing licensed VAS providers, aggregators, and technology companies operating in Nigeria’s telecommunications and digital services sector, took the matter to court. On 15 April 2026, a Federal High Court sitting in Lagos granted interim injunctions preventing the FCCPC from enforcing the DEON regulations against WASPAN’s members.

Nine days later, on 24 April 2026, a Federal High Court in Abuja granted a separate enrolled order preventing the respondent operators from interfering with Nairtime Nigeria’s access to their platforms. Both orders remain in force; the legal questions they raise are before the courts, and this article offers no commentary on their merits.

The FCCPC suspended DEON enforcement on 22 May 2026. Airtel and Glo have since restored their airtime credit services, but services on the remaining networks have not yet been restored as of this writing.

WHAT DOES THIS MEAN FOR USERS?

Approximately 40 million Nigerians actively used airtime credit services before the suspension. The majority are prepaid subscribers in the lower-income brackets: the segment of the market least served by formal financial products and most dependent on microcredit infrastructure embedded in the telecom network. For these users, airtime credit functioned as a basic utility: the ability to make a phone call or access the internet when their balance had run out and their next recharge was hours or days away.