Lapo microfinance bank has launched a ₦10 billion 5-year fixed-rate senior unsecured bond under its ₦30 billion issuance programme, marking a return to the domestic debt market to fund expansion and deepen financial inclusion.
The offer opened on March 23, 2026, and is scheduled to close on April 1, 2026, with interest payments made semi-annually and principal repaid in full at maturity through a bullet structure.
The issuance is being executed via LAPO MFB SPV Plc as Series 1 under the programme.The bond is priced within a 19.00% to 20.00% yield band, subject to book-building, positioning it above comparable sovereign instruments in Nigeria’s fixed-income market.
Minimum subscription is ₦20 million, equivalent to 20,000 units at ₦1,000 per unit, effectively limiting participation to institutional and high-net-worth investors. The instrument carries a BBB- rating from both Agusto & Co. and GCR, indicating moderate credit risk within the local rating scale.
Proceeds from the issuance are intended to expand the bank’s lending capacity, with a focus on micro, small, and medium enterprises as well as financially underserved segments.
This aligns with the institution’s broader strategy of scaling operations through capital market funding while strengthening its role in Nigeria’s financial inclusion framework.
The bank’s recent financial performance provides context for the offer. Profit after tax rose to ₦9.146 billion in 2025, reflecting a 32% year-on-year increase, while net interest income reached ₦59.456 billion.
Its loan book has grown significantly over recent years, alongside total assets of ₦143 billion and shareholders’ equity of ₦42 billion. A capital adequacy ratio of 29% places it comfortably above regulatory thresholds, reinforcing its capacity to absorb risk.
Relative to Federal Government of Nigeria bonds yielding around 16% for similar tenors, the higher return on this instrument reflects a risk premium associated with non-sovereign exposure and prevailing inflation expectations.
The structure offers enhanced income potential but introduces credit and interest rate risks, particularly in a rising yield environment, alongside limited liquidity due to the absence of early exit features.
The bank’s track record in the debt market adds credibility, having previously issued bonds in 2017 and 2020 that were fully repaid at maturity.
The current issuance is positioned as a high-yield fixed-income instrument for investors willing to accept moderate risk exposure in exchange for returns above sovereign benchmarks.
Source: Nairametrics
