AFEX reopens N100bn funding series to bolster Africa’s agro-processors

Nigeria’s first private sector commodities exchange and leading commodities market player, AFEX, has announced the reopening of its $240m (100bn) Asset-Backed Commercial Paper (ABCP) to help strengthen Nigeria’s agriculture sector by offering low-cost financing to agro-processors to bridge the funding gap between lenders and borrowers. The new funding is AFEX’s second in a three-year commercial […]

Nigeria’s first private sector commodities exchange and leading commodities market player, AFEX, has announced the reopening of its $240m (100bn) Asset-Backed Commercial Paper (ABCP) to help strengthen Nigeria’s agriculture sector by offering low-cost financing to agro-processors to bridge the funding gap between lenders and borrowers.

The new funding is AFEX’s second in a three-year commercial paper program that started in Q4 2021, where $65m (27bn) was raised while seeking to raise an additional $175m (73bn) for processors unable to borrow in the commercial paper markets.

ABCP on the other hand is a short-term debt instrument typically providing investors with a competitive 15per cent return on their investment, while maturity is up to 270 days.

While banks or other financial institutions issue the security itself, the ABCP Notes are sponsored by AFEX Commodities Exchange and the proceeds of the issuance is used by AFEX Investment Limited.

According to the CEO of AFEX, Ayodeji Balogun, AFEX has a strong track record in offering distinctively differentiated and innovative financial instruments to the marketplace, adding that the new ABCP will help bridge the gap between agro-processors and investors.