Nigeria: Asset Finance

Nigeria's maritime economy faces a critical challenge in ship financing, where decades of failed vessel loans have left banks wary and shipowners struggling. With the Cabotage Vessel Financing Fund preparing for activation, understanding why previous maritime financing interventions collapsed and how to structure bankable transactions has become essential for both lenders and indigenous operators seeking to build a competitive fleet.

Nigeria's aviation market relies heavily on leased aircraft, creating significant opportunities for international lessors and financiers. However, foreign exchange volatility, regulatory complexities, and enforcement challenges mean that every aircraft lease must be structured with asset recovery in mind. The critical question is not whether a lease will perform as expected, but whether lessors can swiftly protect and recover their assets when transactions become distressed.

Nigerian banks have long prioritized land as collateral for lending, but this orthodoxy increasingly fails to serve businesses whose real value lies in receivables, inventory, and working capital cycles. As manufacturing, distribution, and logistics companies drive economic activity without substantial land holdings, the financial sector's rigid collateral requirements may be stifling growth in the very enterprises that power Nigeria's economy.