Startups and SMEs Urged to Embrace Debt Market Financing for Sustainable Growth
Nigerian startups and small-to-medium enterprises (SMEs) are being encouraged to rethink traditional fundraising strategies and embrace debt market financing as a key avenue for sustainable growth. The New Practice (TNP), a forward-looking law firm with expertise in commercial law and taxation, highlighted this approach during a roundtable and media session themed “Scaling Smarter: Debt Markets as a Growth Catalyst for Startups.”
The event, hosted at TNP’s Lagos headquarters, brought together industry regulators, credit rating specialists, investors, and financial experts to discuss how debt markets can provide startups with disciplined and structured growth opportunities. TNP partners explained that debt financing encourages financial accountability and operational discipline—qualities often overlooked by early-stage founders accustomed to equity-based funding.
Speakers at the roundtable included Temi Popoola, CEO of NGX Group; Timchang Gwatau, Sector Head for Non-Bank Financial Institutions at GCR Nigeria; Seyi Ebenezer, Founder and CEO of Payaza Africa; and Adedayo Aderoju, Lead for Structured Products at Norrenberger. Popoola noted that capital market reforms have made debt instruments like bonds and commercial papers accessible beyond large corporates, with over N1 trillion worth of commercial papers issued in 2025 alone.
GCR Nigeria’s Timchang Gwatau emphasized that strong corporate governance and a solid credit profile are critical for SMEs seeking access to structured debt. He explained that factors such as operating environment, sector resilience, financial outlook, and consistent banking relationships play key roles in determining a company’s creditworthiness and ability to leverage the debt market effectively.
Sharing practical insights, Seyi Ebenezer recounted how Payaza Africa raised N40.37 billion through commercial papers, highlighting the role of discipline in debt management. “Debt enforces structure and accountability,” Ebenezer said, noting that daily interest obligations keep founders alert and financially responsible. He concluded that disciplined, debt-driven growth frameworks can provide startups and SMEs with the clarity and stability needed for long-term success.
source: Leadership