Insights, Banking & Finance

Raising Capital Through Commercial Paper: Why Corporations Should Adopt a More Cost-Efficient Option

Businesses seeking to raise capital have a choice between equity or debt financing. Given the increase in inflation and interest rates, it is commercially prudent to adopt short-term debt financing like commercial papers as an easy way to raise cost-efficient capital for a short term, usually less than a year. The money market is
becoming a viable option for raising capital. Commercial papers (“CPs”) have become an increasingly popular financial instrument in Nigeria’s corporate finance landscape.

According to the monthly reports of the FMDQ exchange, there has been an increase in commercial paper quotations since the beginning of the year. In this article, we will delve into commercial papers, exploring their advantages over other debt instruments, and examining the legal framework and procedure for their issuance in Nigeria…

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