Nigeria’s fast-growing startup ecosystem is being encouraged to reassess long-held assumptions about funding, as The New Practice (TNP) law firm makes a renewed case for debt as a smarter and more sustainable path to scale. This message came during a roundtable at the firm’s Lagos headquarters, where legal and financial experts unpacked why debt instruments—once considered too rigid for early-stage companies—are increasingly proving effective for disciplined expansion.
A Shift Toward Debt-Driven Growth
TNP Partner, Bukola Bankole, led the discussion, noting that debt is evolving into a more attractive alternative to equity for many Nigerian startups. Unlike equity, which can obscure inefficiencies behind large valuations, debt forces founders to maintain financial discipline, stay alert to their cash flow, and make decisions grounded in sustainability rather than hype.
The conversation also highlighted a concerning knowledge gap: many startup founders remain unfamiliar with the process of listing on the Nigerian Exchange (NGX), despite growing opportunities to raise capital through formal markets.
Payaza’s Example: Discipline Over Dilution
One of the day’s most compelling insights came from Seyi Ebenezer, CEO of Payaza Africa, who recounted the fintech’s journey scaling through debt rather than equity. Payaza has already secured ₦40.37 billion across four series of its ₦50 billion commercial paper programme, a success that Bankole described as a powerful demonstration of structured, disciplined financing.
Ebenezer told participants that Payaza intentionally turned away early interest from VCs and private equity firms.
“We looked at the prospects and said to ourselves that this thing can work on a debt level,” he said, emphasizing that discipline—not intellect—is the true foundation of business performance.
“Disciplined people supervise smart people,” he added.
For him, debt is a natural enforcer of structure. With interest accruing daily—even on weekends—founders are pushed to plan better, meet deadlines, and maintain clean financial books. The result, he argued, is growth rooted in accountability and resilience.
Commercial Paper Gains Ground
The roundtable also explored the increasing use of commercial papers, once viewed as instruments reserved for large corporates. In 2025 alone, more than ₦1 trillion worth of commercial papers have been issued, reflecting stronger adoption by mid-sized and emerging businesses.
Temi Popoola, CEO of NGX Group, said this surge is partly due to proactive regulatory support. He praised the Securities and Exchange Commission (SEC) for clearing hurdles that previously discouraged smaller players.
“Today, we have a regulator who supports the market more than I do as a market operator,” he remarked.
However, Popoola stressed that transparency remains non-negotiable for any company seeking public financing.
“As long as you want to get money from people, then you must be ready to disclose information,” he said.
While acknowledging that disclosure requirements can seem daunting for startups, he maintained that responsible founders should have nothing to fear.
L-R: Temi Popoola, GMD/CEO, Nigerian Exchange Group ; Timchang Gwatau, Sector Head for Non- bank Financial Institutions, GCR Nigeria; Adedayo Aderoju, Lead, Structured Products, Norrenberger; Bukola Bankole, Partner, TNP; and Seyi Ebenezer, Founder and CEO, Payaza Africa Ltd at the TNP Business and Finance Roundtable 2025 held at the TNP Office in Ikoyi, Lagos.
Persistent Gaps in Listing Awareness
A recent report by TLP Advisory underscores one of the issues raised at the event: insufficient knowledge about listing processes. The study, “Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX,” warns that the scarcity of local listings poses risks to long-term value creation in Africa’s largest startup ecosystem.
According to the report, 53% of founders surveyed admitted they do not fully understand what it takes to go public. This lack of awareness continues to slow the rate at which Nigeria’s high-growth startups engage with the NGX, despite efforts like the launch of the NGX Technology Board in 2022.
A Call for Smarter Scaling
For TNP and other stakeholders at the roundtable, the message is straightforward: debt is no longer a last resort but a viable, strategic catalyst for growth—especially for founders willing to embrace discipline and transparency. As Nigeria’s financing landscape evolves, startups that rethink their approach to scaling may discover that sustainable expansion often lies in balancing ambition with accountability.