Accion Microfinance Bank Limited has successfully listed N2.02 billion Series 1 Commercial Paper (CP) on the FMDQ Securities Exchange, under its broader N5 billion Commercial Paper Programme.
The approval, granted by FMDQ’s Board Listings and Markets Committee, provides the bank with cost-efficient short-term funding to bolster its lending operations to micro-entrepreneurs and low-income earners across Nigeria.
The move reflects a growing trend among financial institutions to leverage Nigeria’s capital markets to access working capital amid rising borrowing costs in the commercial banking sector.
According to the official release, this Series 1 CP issuance was oversubscribed, signalling strong investor confidence in Accion MFB’s operational strategy and its commitment to financial inclusion.
“This CP issuance is not just about raising funds; it is about reinforcing our capacity to provide working capital, expand lending to small businesses, deepen financial innovation, and accelerate our digital transformation,” said Mr. Taiwo Joda, Managing Director of Accion MFB. He added that the proceeds will enable the bank to extend more credit to micro-entrepreneurs and small-scale businesses, a move that aligns with its mission to empower low-income communities.
Sponsored by FBNQuest Merchant Bank Limited, the issuance demonstrates the critical role merchant banks play in facilitating efficient access to capital. Mrs. Yetunde Falore, Head of Investment Banking at FBNQuest, stated: “We are proud to have guided this debut transaction. The oversubscription reflects investor confidence in Accion MFB and its financial inclusion mandate. By leveraging the capital market, institutions like Accion MFB can scale their impact effectively.”
In a parallel development, Payaza Africa Limited, a partner of MasterCard and Visa, is currently raising approximately N50 billion via Series 1 and 2 Commercial Papers under its N150 billion Commercial Paper Programme. Payaza has cumulatively raised over N70 billion through six CP series since its inception, with N32.53 billion fully repaid. The remaining balance is within the scheduled repayment timeline, reflecting disciplined financial management.
Experts highlight that CP issuances offer companies a cost-effective alternative to traditional bank loans, enabling them to meet operational and expansion needs while reducing reliance on high-interest borrowing. For microfinance banks like Accion, the proceeds enhance lending capacity to micro-entrepreneurs, contributing to broader financial inclusion and economic empowerment.
Financial analysts note that Nigeria’s commercial paper market is gaining traction as corporates increasingly seek agile, short-term financing solutions. The FMDQ Securities Exchange facilitates this by providing a regulated platform for CP issuances, attracting both institutional and retail investors. By participating in this market, firms can mobilize capital more efficiently than through conventional bank loans.
Accion MFB’s initiative is particularly significant given the challenges faced by small businesses in accessing affordable financing. Many micro-entrepreneurs and low-income earners are unable to meet collateral requirements for traditional loans, making microfinance institutions essential to bridging this gap. With the funds raised through the CP, Accion aims to scale its lending operations, supporting thousands of small businesses nationwide.
The issuance also underscores the synergy between technology-enabled capital markets and financial institutions seeking alternative funding sources. Digital platforms, streamlined processes, and transparent reporting mechanisms have made CPs an attractive avenue for both issuers and investors.
Looking ahead, analysts believe that increasing corporate participation in Nigeria’s CP market could improve liquidity, reduce borrowing costs, and enhance the capacity of microfinance banks to serve underserved communities. Such developments are expected to have a ripple effect, stimulating job creation, entrepreneurship, and economic growth at the grassroots level.
