Zitra marks six years, targets N50bn commercial paper programme

Zitra Financial Services is preparing to raise N50 billion through a commercial paper programme as the financial services group marks six years in operation and seeks to expand lending, digital banking, and investment management for Nigerian businesses.

The programme, which will be issued in three tranches, includes a first series of up to N10 billion, Babatunde Obadero, founder and chief executive officer, said. the company expects the fundraising to accelerate its expansion plans, strengthen its funding capacity and deepen its presence in Nigeria’s financial services market.

“Six years ago, there was no boardroom looking this cool. There were no Ivy League-educated colleagues; it was just us grinding and trying to make this dream come alive,” Obadero said.

Since opening its first office in Lagos in 2020, Zitra has expanded into a financial services group comprising Zitra Microfinance Bank, Zitra Fund Managers and ZitraPay. The businesses provide lending, savings, investment management and payment services to individuals and enterprises.

Obadero said the company had disbursed more than N30 billion in loans, served over 200,000 customers through its digital platforms and grown its balance sheet to approximately N50 billion.

The group intends to use its next phase of growth to expand geographically, improve digital access and develop products that address the financing and financial management needs of small businesses.

“Our goal is to ensure that if you think about retail digital financial services in Nigeria for the future, our name will be on your lips,” he said.

However, its expansion has come with challenges, including rising interest rates, inflation, regulatory uncertainty and the difficulty of maintaining access to funding while providing affordable credit to businesses.

Obadero said the depreciation of the naira and the liberalisation of the downstream oil and gas sector had contributed to higher operating costs and reduced customers’ disposable income.

The resulting inflation and increase in interest rates also raised borrowing costs for Zitra and its customers, affecting the ability of businesses to access credit.

“Interest rates going up had a cost impact for us. But it also has a cost impact on our customers because it meant that their interest rates on their ability to borrow took a hit,” he said.

However, with the economy now stable as both indiation and interest rate pressure easing,borrowing cost will definitely go down.

Femi Okuyelu, co-founder and director of business development, said the company had grown from five employees to more than 120, with offices in Lagos, Abuja and Uyo, alongside satellite offices in Kaduna and Niger State.

He said Zitra’s business model seeks to formalise access to credit for Nigerians who often depend on family members, cooperatives and informal lending arrangements.

“What we are building is to make it more formal, so that we can include more people to have access to credit,” Okuyelu said.

Okuyelu identified regulatory challenges as another constraint, particularly situations in which actions involving an individual customer could affect a financial institution’s operations.

He said restrictions placed on an institution’s account over a single customer’s transaction could disrupt services for its wider customer base.

Olaotan Olamuyiwa, co-founder and chairman of Zitra Fund Managers, said the next priority is to finance more small businesses while ensuring that lending remains commercially sustainable.

“How do we fund these people in a way that will not lose money, obviously, and that will impact their businesses and their lives?” he said.

Zitra said its fund management subsidiary oversees N7 billion in assets, providing investment and treasury management services to retail investors, corporates and other institutions. ZitraPay, meanwhile, is expanding its cross-border payment, foreign exchange and liquidity management services.