POD - Seyi Ebenezer on why African startups should stop chasing cheques and start building books
Payaza Africa's co-founder and CEO Seyi Ebenezer makes the case for debt over venture capital, explains why credit ratings are the ultimate negotiating weapon for African founders, and passionately advances the idea of a pan-African credit rating agency built by the continent, for the continent.
Episode overview:
Seyi Ebenezer didn't come to fintech from a hackathon or an accelerator. He came from KPMG's audit desks and Access Bank's corporate finance floors. That training shows in everything about how he has built Payaza Africa, from claims of launching profitably with a single gas station client to rejecting six or seven VC approaches in favour of bootstrapping a business he could defend on paper.
In conversation with Andile Masuku, Ebenezer — who co-founded Payaza in 2020 and launched in March 2022 — lays out a philosophy that cuts against the grain of Africa's startup narrative. Where the dominant playbook says raise fast, grow faster, and worry about unit economics later, Ebenezer argues that African founders face a structural reality that makes that approach uniquely dangerous: a "natural prejudice rating" on the continent that means even Aliko Dangote isn't immune to credit downgrades.
His conclusion: if the system is stacked against you, your books had better be immaculate.
The conversation covers Payaza's origins solving payment reconciliation for Nigerian fuel stations, why Ebenezer treats every product that isn't profitable within six months as a candidate for shutdown, and how securing investment-grade credit ratings from Augusto & Co, DataPro, and GCR (with a Moody's rating to boot) has transformed the company from price taker to price giver in investor conversations.
Along the way, Ebenezer draws a direct line from the 2008 financial crisis to the recent VC funding winter in African tech, and argues that the founders who built structure survived both.
But the conversation's most striking moment comes near the end with Ebenezer's call for the creation of a pan-African credit rating agency; one that uses community-based risk models suited to how African business actually works, rather than importing Western frameworks wholesale.
Key insights:
- On why debt creates discipline: Ebenezer's central thesis is that debt financing forces founders to confront profitability from day one. Unlike equity, where capital can mask weak fundamentals, debt has interest that "does not sleep on Saturday, does not sleep on Sunday." He argues this constraint is a feature, not a bug, particularly for African founders who face structural disadvantages in how the market perceives their businesses.
- On building from the books outward: At Payaza, corporate governance came before scale. Ebenezer engaged Deloitte as an auditor from the company's earliest days. It's a decision he says he initially regretted when the first audit surfaced over sixty exceptions. But those painful early investments in structure are what enabled Payaza to access capital markets, raise commercial paper without collateral, and achieve investment-grade credit ratings — outcomes virtually unheard of for a Nigerian fintech.
- On the "prejudice rating" African businesses carry: Ebenezer points to World Bank data showing that Africa's default rate on infrastructure funding is just 1.9 per cent (second only to the Middle East at 0.9 per cent) while Western Europe sits at 9.1 per cent. Yet a business headquartered in Western Europe would still receive a higher credit rating. His response: African founders must over-prepare, building the kind of documentation and governance that neutralises bias before they walk into any room.
- On rejecting the VC playbook — without rejecting VC: Ebenezer is careful not to demonise venture capital. His argument is about sequencing: build structure first, demonstrate profitability, then engage equity investors from a position of strength. He turned down six or seven approaches during the VC boom, telling his team to trust the longer game. The result: when he now sits across from potential investors, he sets the terms. "Evidence dominates argument," he says.
- On why African businesses can't emulate Amazon's playbook: When pressed on whether his conservative approach stifles ambition, Ebenezer invokes the Dangote example. If Fitch can withdraw the credit rating of Africa's wealthiest industrialist, and downgrade Afrexim Bank, then no African founder can afford to assume the market will extend them the patience it gave Jeff Bezos. "If they could touch Dangote," he asks, "who are we?"
- On Payaza's efficiency-first growth model: Rather than competing on price — a "race to the bottom" — Payaza competed on settlement speed, offering same-day payouts to merchants using its own capital while competitors operated on T+1 or T+2 cycles. This earned trust and referrals, creating organic growth with thin but real margins. Every merchant is evaluated against an activity-based costing model: if onboarding them isn't profitable, the relationship doesn't proceed.
Notable moments:
1. The Petrocam origin story: Payaza's first client was Petrocam, a Nigerian fuel retailer with 57 filling stations. The problem: reconciliation chaos and shrinkage across distributed locations. Payaza built "Branches," a product that gave the group CFO a centralised, real-time view of collections across every station — eliminating accounting discrepancies, reducing theft, and cutting the finance headcount needed at each site. The product was profitable from day one. "We are solving a problem for them and then we're charging them fairly," Ebenezer recalls. That first deal set the template for everything that followed.
2. The credit rating upgrade that broke the rules: After raising commercial paper on the Nigerian capital market and making an early repayment, Payaza received a credit rating upgrade from BBB- to BBB+ in a matter of months. The norm is a 24-month cycle between upgrades. The rating agency told them they had "a very good case" — a vindication, Ebenezer argues, of prioritising fundamentals over flash.
3. The SME Tribe experiment yielding zero bad debt: When Instagram went down for several days, Payaza saw an opportunity. It built SME Tribe, a web-based marketplace that mirrored what small traders were selling on Instagram, then layered on "Payaza Boost": uncollateralised working capital advances of 25 per cent of a merchant's three-month average collections. The result: zero non-performing loans. Ebenezer uses this as evidence that African credit risk models need to account for community-based accountability, not Western-style board structures.
4. The pan-African credit rating pitch: In the episode's most charged exchange, Ebenezer pivots from discussing his own business to issuing a direct challenge: Africa needs its own credit rating infrastructure, potentially housed under Afrexim Bank or the African Union's APRM framework. He argues that the global rating oligopoly (agencies built "200 or 400 years ago" that keep acquiring regional competitors) cannot adequately assess African risk because Africa is "community-based." His proposed model would incorporate social accountability mechanisms alongside financial metrics. And then, live on the podcast, he nominates Andile Masuku to lead the convening.