Earn Up to 28.5% in Nigeria: A Guide to Investing in High-Yield Commercial Papers (2025)
Looking for high-yield, fixed-income investments in Nigeria? Our 2025 guide explains how to invest in commercial papers, with top companies offering yields up to 28.5%. Learn the basics, see real returns, and understand the risks.
For Nigerian investors seeking high-return, short-term opportunities, the commercial paper (CP) market has emerged as a clear winner in 2025. With the Central Bank’s Monetary Policy Rate (MPR) remaining high, top Nigerian corporations are offering double-digit yields, making CPs one of the most attractive fixed-income investments available today.
Between June and July 2025 alone, over N468 billion worth of commercial papers were issued by companies across banking, manufacturing, and healthcare sectors, offering investors impressive returns of between 21% and 28.5%.
This guide breaks down what commercial papers are, why they are so profitable right now, and how you can get started.
What Are Commercial Papers? A Simple Explanation
A commercial paper is a short-term debt instrument issued by a company to raise funds for its immediate needs, like managing working capital. In simple terms, you are lending money to a reputable corporation for a fixed period (usually between 90 and 270 days), and in return, they pay you a high rate of interest.
It is an unsecured loan, meaning it is not backed by collateral, which is why only companies with strong credit ratings can successfully issue CPs.
Why Are Commercial Paper Yields So High in 2025?
The primary reason for the high yields is Nigeria’s elevated interest rate environment. To combat inflation, the CBN has kept the MPR high. This forces companies that need to borrow money to offer very attractive rates to investors, creating a lucrative opportunity for those with capital to invest.
How You Earn Money: Implied Yield vs. Discounted Rate
There are two main ways to earn a return from commercial papers:
Implied Yield (Hold to Maturity): You invest a sum of money and hold the CP until its maturity date. At the end of the period, you receive your initial investment plus the agreed-upon interest (the implied yield). This is the most common method.
Discounted Rate (Upfront Return): You buy the commercial paper at a price lower than its actual face value. For example, you might pay N900,000 for a CP with a face value of N1,000,000. At maturity, you receive the full N1,000,000, and the N100,000 difference is your profit, which you effectively got “upfront.”
Who’s Offering the Best Returns? (June-July 2025 Snapshot)
The market was buzzing with high-yield offers in mid-2025. Here are some of the top-performing commercial papers that were issued:
(Note: These returns are for illustration, calculated on a N1 million investment before a 10% withholding tax and any brokerage fees.)
As the table shows, Cutix Plc led the market with a 270-day yield of 28.5%, while SKLD and Daraju offered the highest yields for 180-day tenors at 24.65% and 24.50% respectively.
Key Things to Know Before You Invest
Before diving in, here are some critical factors to consider:
Minimum Investment: The official minimum subscription for a commercial paper is typically N5 million. However, many stockbroking firms and licensed fintech platforms allow investors to participate with smaller amounts (like N1 million or less) through pooled or retail investment structures.
Taxes: Your interest income from CPs is subject to a 10% withholding tax, which is usually deducted at the source.
Brokerage Fees: Your stockbroker or investment platform will charge a fee for facilitating the transaction. These fees can vary, so it’s important to ask about them upfront.
Understanding the Risks: While CPs from highly-rated companies are considered relatively safe, they are not risk-free.
Default Risk: The chance that the company cannot pay back the principal at maturity.
Liquidity Risk: Difficulty selling your CP before maturity if you suddenly need cash.
Credit Downgrade Risk: A drop in the company’s credit rating could affect the value of its CP.
Always check the issuer’s credit rating from a reputable agency like GCR, DataPro, or Augusto & Co. A higher rating (e.g., A1, AA) signifies lower risk.
How to Get Started
Investing in commercial papers is straightforward. The primary way to participate is through a licensed stockbroker or a wealth management firm. Some SEC-licensed fintech investment platforms also offer access to commercial papers.
Conclusion
In Nigeria’s current high-interest-rate environment, commercial papers offer a powerful opportunity for investors to earn significant returns over a short period. While the high yields are attractive, it is crucial to perform due diligence by checking the company’s financial health and credit rating.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always consult with a qualified investment advisor to assess your personal financial situation before making any investment decisions.
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