EVALUATING THE CORPORATE LEGAL FRAMEWORKS REGULATING ALTERNATIVE FINANCING MECHANISMS FOR NIGERIAN STARTUPS

Authors

  • ADUMA, Onyeka Christiana & OBIAELI-CHIDEBE, Oluoma C.P. Author

Abstract

The rapid growth of alternative financing has necessitated diverse and innovative financing mechanisms beyond traditional banking system. Alternative financing mechanisms such as crowdfunding, venture capital, and peer-to-peer lending have emerged as crucial sources of funding for startups seeking flexibility and accessibility. However, the effectiveness of these mechanisms is significantly influenced by corporate legal framework governing their operations. Using a doctrinal research methodology, this paper evaluates the corporate legal frameworks regulating alternative financing mechanisms for Nigerian startups. The study examines the existing corporate legal frameworks in Nigeria, including the Companies and Allied Matters Act and the Investment and Securities Act, in fostering a conducive environment for startup financing. It identifies gaps in the Nigeria’s existing legal framework. Findings reveal regulatory recognition of the importance of alternative financing mechanisms in Nigeria but reveal a lack of comprehensive and coordinated approach necessary to fully realize the potential of these mechanisms. The study recommends targeted reforms, enhanced inter-agency coordination, public education campaigns and responsive regulatory approaches to address the identified gaps.

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Published

2025-09-29