LAPO Microfinance Bank (LAPO MFB) has initiated the sale of a N10 billion, five-year fixed-rate senior unsecured bond, the first tranche under its broader N30 billion Debt Issuance Programme. The move signals the bank’s strategic intent to leverage Nigeria’s domestic capital markets to finance its growth and deepen its reach among underserved communities.
The offer, which opened on March 23, 2026, will close on April 1, 2026. Investors in the bond will receive semi-annual coupon payments, with the principal repaid in full at maturity. The coupon is expected to fall within a range of 19.00% to 20.00% per annum, with the final rate to be determined following the book-building process.
Key Details of the Bond Issue
- Issuer: LAPO MFB SPV Plc
- Series: Series 1 Bond
- Tenor: 5 years
- Price Range: 19.00% – 20.00% p.a. (finalized post-book build)
- Redemption: Bullet repayment at maturity
- Coupon: Fixed rate, semi-annual payments
- Issue Rating: BBB- (Agusto & Co.) / BBB- (GCR)
- Minimum Subscription: N20 million (20,000 units at N1,000/unit), multiples of N1,000 thereafter
- Use of Proceeds: To expand financial services for micro, small, and medium enterprises (MSMEs) and other underserved segments across Nigeria
LAPO Microfinance Bank at a Glance
Founded in 1987, LAPO MFB is a prominent microfinance institution operating in 34 states and the Federal Capital Territory. The bank specializes in tailored financial solutions for low-income households and small businesses, providing a platform for financial inclusion in Nigeria’s underserved communities.
Strategic Purpose of the Bond
LAPO Funding SPV Plc, acting as the bond issuer, plans to channel the proceeds into initiatives that promote access to credit for micro and small enterprises. The issuance represents a continuation of LAPO MFB’s strategy to fund its growth through capital market instruments, following previous successful bond placements of N3.15 billion in 2017 and N6.2 billion in 2020, both fully repaid.
Investors should note that the coupon rate will only be finalized after the book-building process. Assuming an illustrative rate of 19.50%, a minimum investment of N20 million would yield an annual interest of N3.9 million, payable in two equal installments over the year.
Financial Performance and Investment Considerations
LAPO MFB has demonstrated strong financial growth over the past five years, with profit after tax growing at a compounded annual rate of 25.48%. In 2025, the bank reported a profit of N9.146 billion, a 32% increase from 2024.
Net interest income, largely driven by its lending operations, grew to N59.456 billion in 2025 from N46 billion in 2024, reflecting steady expansion of its loan book from N75 billion in 2021 to N118 billion in 2025. Total assets reached N143 billion, supported by a robust equity base of N42 billion and a capital adequacy ratio of 29%, well above regulatory requirements.
The bond, rated BBB- by both Agusto & Co. and Global Credit Rating Company (GCR), offers a comparatively higher yield than similar-tenor Nigerian government securities, which currently yield around 16% per annum. While the higher coupon compensates for the relative credit risk, potential investors should remain aware of the inherent risks, including default risk and limited liquidity due to the fixed five-year tenor.
Investor Takeaways
The LAPO MFB Series 1 Bond presents a high-yield opportunity within Nigeria’s fixed-income market. Investors are likely to find the attractive coupon appealing relative to sovereign bonds, though the higher yield comes with increased credit risk.
The bank’s strong financial performance, disciplined capital management, and history of meeting prior debt obligations provide confidence, but prospective buyers should consider the fixed-term nature of the bond and potential market fluctuations.