Businesses in Nigeria are increasingly turning to the debt capital market as they struggle with rising interest rates, devaluation and inflation.

Six firms, including ABC Transport, Ardova and Dangote Cement, have raised a total of NGN364.1bn ($884m) through the market in the past five years as conventional loans become too expensive.

The Central Bank of Nigeria caps the maximum lending rate at 28.08%, but small- and medium-sized enterprises are paying up to 33% interest on commercial loans, and microfinance banks are charging between 2% and 5% monthly.

Corporate entities are also accessing inter-company loans, which offer a number of advantages over borrowing from banks, including avoiding fees and being able to move cash quickly.

Startups without a valuation are turning to convertible debt notes as a means of raising capital more quickly and cheaply than by getting a bank loan.

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Dangote Cement has raised NGN63.7bn from the capital market in two tranches to help fund its expansion and improve competitiveness.

The firm’s CEO, Michel Puchercos, said the bond issue would help the company achieve its expansion goals, including supporting an export strategy.

ABC Transport, Ardova, Dangote Cement, the Dangote Group, Family Homes Funds and the Lagos Free Zone Company have all raised funds through bond issuances over the past five years.

Data from the Nigerian Exchange showed 65 corporates raised commercial papers, while 42 issued bonds on the FMDQ Securities Exchange platform.