For much of last year, digital lender FairMoney was the undisputed poster child for fintechs tapping Nigeria’s public debt market, with its commercial paper issuances making frequent headlines. Today, the conversation has shifted. The once-frequent announcements have quieted, and a new player, payments fintech Payaza, is stepping into the void, signaling a broader market shift driven by tighter regulations.
The changing of the guard became apparent when a Payaza executive announced the company had successfully repaid its Series 1 & 2 Commercial Paper (CP) issuance, totaling a substantial ₦20.3 billion (USD13.6 million). This move, showcasing strong financial discipline, comes just as the market is adapting to a new, more demanding regulatory framework that took effect in April 2025.
In a recent social media post, Payaza CEO Seyi Ebenezer celebrated the milestone, attributing it to “the power of discipline, a great team, and good governance.” The post highlighted the company’s success in winning the confidence of local creditors by “demonstrating sound risk management practices, like the big corporates that have traditionally been viewed as more bankable.”
This success stands in contrast to the previous era, which saw fintechs like FairMoney frequently use CPs as a quick alternative to venture capital. In a notable move from August 2024, FairMoney raised ₦1.69 billion under a newly expanded ₦10 billion CP program, a move its CEO Laurin Hainy said was a “testament to our financial strength and market confidence.”
While FairMoney was a pioneer in using this funding route, the rules of the game have fundamentally changed, creating a new litmus test for market participants.
The New Rulebook
The shift has been directly caused by a regulatory overhaul from Nigeria’s Securities and Exchange Commission (SEC) and the National Pension Commission (PenCom). Alarmed by the “open season” on CP fundraising, regulators introduced stricter guidelines to protect investors and ensure market stability.
The new SEC framework, effective April 24, 2025, ended the era of easy liquidity with several key mandates:
- Minimum Equity: Issuers must now have minimum shareholders’ equity of ₦500 million.
- Credit Rating: Only companies with an investment-grade credit rating from a licensed agency are eligible to issue CPs.
- Bank Backing: A commercial bank must now act as the issuing and paying agent (IPA) for any CP issuance, linking fintechs back to traditional financial institutions.
- Maturity and Cap: CPs now have a maximum maturity of 270 days, and issuances are capped at 30% of the issuer’s total shareholders’ equity.
Compounding this, PenCom prohibited pension funds from investing in CPs issued by any entity outside the banking sector, effectively cutting off a major source of capital for fintechs and other startups.
A Market Reshaped
These stringent new rules have created a clear dividing line in Nigeria’s startup ecosystem. The days of using commercial papers as a simple stopgap for operational funding are over. The market now favors companies that can demonstrate robust financials, impeccable governance, and sustainable business models — qualities that Payaza has successfully projected with its recent full repayment.
For the broader fintech landscape, the impact is twofold. On one hand, the regulations have introduced a much-needed layer of stability and risk management, filtering out companies without a strong financial backbone. On the other, it has constrained access to a vital funding channel, potentially slowing growth for emerging companies that cannot meet the heightened requirements.
As the ecosystem adapts, fintechs are being pushed to explore more sustainable funding avenues, whether through a return to the venture capital market or by forging strategic partnerships with traditional banks. Payaza’s recent success is not just a company milestone; it’s a clear indicator of the new archetype for success in Nigeria’s public debt market — one built on discipline, not just disruption.