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The short answer
The simplest legal route is for the borrower to repay in naira into a naira account you hold in Nigeria, which you convert when you choose. If they hold dollars, pounds or euros in a domiciliary account, the CBN's 2026 FX Manual lets them send up to US$10,000 a day by direct transfer without Form A. Agree the repayment currency in writing at the start and keep a receipt for every payment.
First, agree what is being repaid
Most disputes over family and friendship loans are not about honesty but about the exchange rate. If you lent £1,000 that was converted into naira, and the naira weakens before you are repaid, the same naira sum buys fewer pounds. Decide at the outset, in writing, whether the debt is a naira amount or a foreign-currency amount, who bears any currency movement, the schedule, and what happens if a payment is late.
Example only. You lend the naira equivalent of £1,000. If the naira weakens 10% against sterling (10% more naira per pound) by the time you are repaid in naira, the repayment converts back to about £909. If the agreement had been in pounds, the borrower would owe 10% more naira to clear it. Neither is wrong; it just has to be agreed.
Route 1: repayment in naira to your Nigerian account
The borrower transfers naira to a naira account in your name. There is no foreign exchange step on their side, every payment leaves a bank record, and you decide when and whether to convert. This suits regular instalments and borrowers who earn in naira. Make sure the account is active and in your own name; payments into a relative's account weaken your record that the debt was repaid to you. See money held in a relative's name.
Route 2: repayment in foreign currency from a domiciliary account
If the borrower already holds foreign currency in a domiciliary account in Nigeria, the CBN Foreign Exchange Manual 2026, in force from 1 June 2026, removed the Form A requirement for outward remittances from self-funded domiciliary accounts and allows direct telegraphic transfers of up to US$10,000 a day (Mondaq, Pavestones Legal, June 2026). TheCable's summary of the Manual adds that people opening or depositing into domiciliary accounts are not required to disclose the source of funds. The money then arrives in your foreign account like any international transfer. Your own bank abroad may still ask what the payment is for; a short loan agreement answers that.
What the borrower cannot easily do
A borrower holding only naira cannot simply buy foreign currency at a bank to repay a private loan abroad: the official allowances for travel, school fees and medical bills have their own documents and purposes. If they need to convert, they should ask their bank which window and documents apply. For more on this, see can someone in Nigeria send you dollars?.
Routes to avoid
- Informal peer-to-peer naira swaps arranged through strangers: they leave weak records and expose both sides to frozen accounts and fraud; see P2P naira swap risks.
- Cash handed to a third party to pass on: no proof it reached you.
- Splitting one repayment into many tiny transfers to look smaller: it can draw compliance questions on both sides.
Records that protect both sides
- A short written agreement: names, amount, currency, date lent, schedule, and whether interest is charged.
- Proof of the original loan: your transfer receipt or statement line.
- For each repayment, a receipt or statement showing payer, payee, amount and date; use a clear reference such as 'Loan repayment 3 of 10'.
- A running balance you both sign off, even by message, after each payment.
- A final note confirming the loan is fully repaid.
Our guide to keeping a record of money sent to family has a simple template that works for loans too.
If repayments stop
Distance makes a missed payment harder to discuss, so settle the process before it happens. A simple agreement can say that if an instalment is more than a set number of days late, both of you talk within a week and agree a revised schedule in writing. Keep the tone of the record factual: dates, amounts paid, amount outstanding. If the borrower's circumstances change, a reduced instalment that continues is usually worth more than a demand that ends the payments. If you ever needed to recover the money formally, the written agreement and the bank trail of both the loan and each repayment are the evidence a lawyer in Nigeria would ask for first, so keep them together in one folder rather than scattered across chat threads.
Tax and other points
Repayment of the money you lent is a return of your own capital. Interest you charge may be taxable income where you live, and the rules differ by country; check your local tax authority's guidance. This is information, not tax advice. If the repayment comes into a Non-Resident Nigerian account, note that under the CBN framework effective January 2025, foreign-currency balances are repatriable without restriction (Mondaq, May 2025).
Where Pryme fits
With a Pryme Personal Account you hold naira account details that a borrower in Nigeria can pay into, alongside your home currency, and you can convert with Swap when you choose, seeing the rate and fee before you approve. For proof, you can generate a regular or a verifiable receipt or statement through Pryme's partnership with VerifyDoc.ai (receipts), which anyone can check is genuine and unaltered.
Questions people ask
Can my brother in Nigeria pay back my loan in dollars?
Yes, if he holds dollars in a domiciliary account. Under the 2026 FX Manual he can transfer up to US$10,000 a day directly without Form A. Buying dollars with naira for this purpose is harder.
Is it legal to receive money from Nigeria abroad?
Yes, through banks and licensed providers. Keep records showing what the money is for.
Should the loan be in naira or pounds?
Either works if it is agreed in writing. A naira loan puts exchange-rate risk on the lender; a foreign-currency loan puts it on the borrower.
Do I pay tax on a loan repayment?
Repaid principal is generally your own money back. Interest may be taxable where you live; check your tax authority's guidance.
Sources
- Mondaq (Pavestones Legal): Key regulatory update, the CBN Foreign Exchange Manual 2026 (24 Jun 2026) · accessed Oct 2026
- TheCable: 7 things to know about CBN's new FX manual (3 Jun 2026) · accessed Oct 2026
- Mondaq: CBN operational framework for Non-Resident Nigerian Ordinary and Investment Accounts (22 May 2025) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.