The Informal Bank That Built Afrobeats

1. The capital arrived late

On 30 January 2019, Mavin Records announced a multimillion-dollar equity investment from Kupanda Holdings, a joint venture between Kupanda Capital and TPG Growth. TPG's portfolio already included Spotify, Uber and Airbnb. Mavin had been founded in Lagos seven years earlier by Don Jazzy. On 28 March, Warner Music Group announced a pioneering partnership with Chocolate City, which it described as the most influential independent record label in Nigeria. On 11 May 2020, Universal Music Group announced a strategic global partnership with the Aristokrat Group for recordings and publishing. On 26 February 2024, Universal announced a majority investment in Mavin Global.

Five years and four deals. That is where the usual story of Afrobeats begins, and it is chronologically backward.

Nobody signing those cheques was funding a guess. What they were buying was a market that had already been proven at scale by people with no balance sheet, no distribution contract and no legal entity worth the name. Nigerian music had been produced, duplicated, marketed and monetised at industrial scale for roughly two decades before Kupanda wrote the first cheque. It just wasn't happening through instruments that register as finance.

The infrastructure that actually built the genre was a sprawling, mostly unrecorded network of informal capital allocation: personal savings, family money, diaspora remittances, marketer advances, trader credit. A venture system that ran on trust and phone calls, without a single pitch deck.

2. The documented informal layer

Before you can ask how the music was funded, you have to look at the country it was funded in, because the money habits came first.

Nigeria has a long-standing tradition of informal financial institutions, systems built to mobilise savings and extend credit where the formal banks were absent, unreachable or predatory. The most common form is the ROSCA, the rotating savings and credit association: a fixed group of contributors puts an agreed amount into a pot daily or weekly, and the total goes to one member in rotation, then the next, until everyone has had a turn. The names change with the region. Yoruba speakers call it ajo. Among Igbo speakers it is commonly called isusu; esusu is a widely used Nigerian form of the term, while adashe is used in Hausa-speaking communities.

Here is where the research stops, and the article should be honest about it. There is an attractive story that a singer saved up their contribution and paid for a studio session out of it. No source supports it. No interview, no contract, no court record ties the ajo pot to the financing of any Afrobeats act, and the general fact that Nigerians save this way is not evidence about how any one of them recorded.

What the sources do support is wider, and still useful. The pot funded producers, marketers and vendors. It never funded a specific record. It supplied the everyday liquidity that kept people trading between the moment they spent and the moment money came back, in a country where a formal loan meant interest, a bank branch, and usually a guarantor you already knew. Afrobeats did not need a music-specific bank. It grew inside a culture that had already solved the problem of small-scale credit without one.

3. The Alaba economy

Alaba International Market sits in Ojo, on the Lagos side of the border with Ogun State, and for roughly two decades it was where Nigerian music met its public. The traders who started there sold electronics. The move that built the music business was a move out of hardware and into software. By the 1980s and 90s the market had become the central hub for CD and VCD duplication, and piracy had stopped being a crime to be tolerated and become the business model itself.

In that ecosystem, distribution meant something specific. It was not a contract signed with a major label. It was a transaction with a marketer. For most emerging artists the target was placement, because royalties barely existed in the informal sector. You could pay a distributor to put your song on one of the compilation CDs already moving through Alaba, and what you were buying was access to a network that already existed. Pay to play, literally. The marketer had no interest in your long-term career. He wanted the disc to move. High risk, immediate turnover, no paper trail.

The same logic ran all the way to the airwaves, and I have one piece of it from my own family. In 2012 my grandmother was president of her Catholic Women's Society when a song the church had released needed airplay, and getting on air meant paying. The society paid ITV and Raypower to play it, something for the boys, and that was simply how a church song got onto the radio in that decade. A church women's club buying its way onto broadcast, because nothing aired for free. The money that pushed a compilation disc through Alaba and the money that bought a radio slot moved on the same logic, from the market gate to the transmitter.

4. The money flow map

Because the system was informal, the money moved in a circle and left no ledger. What follows is a reconstruction, assembled from descriptions of how the Alaba era worked. It is not a set of accounts.

An artist typically financed the recording from personal savings or family money. The money went to a producer, who often worked for a mix of cash and future favours. Once the track existed, the artist went looking for a marketer, and the marketer was the gatekeeper to Alaba. From there the song was duplicated by the thousands and pushed out to street vendors, transport hubs and small shops. Radio DJs and club promoters came next, often paid what everyone called facilitation fees to get the record into rotation. The return did not come from CD sales, because the pirates had already eaten that margin. It came from shows, corporate endorsements and appearances, and a slice of that went straight back into the next recording or a more expensive video. The machine generated visibility rather than royalties, and visibility could be liquidated into cash at a live event on a Saturday.

Running underneath every step of it was the piracy tax. The same duplication plants that carried a record out to the vendors also copied it without asking, often so close to the legitimate pressing that the two were hard to tell apart. Eedris Abdulkareem's "Jaga Jaga" moved through Alaba in 2003 with distribution and copying running at the same time, reached millions of Nigerians, and paid its maker a fraction of what it earned. Everybody who built an audience in that era paid that toll, and any account of Nigerian music that leaves the leak out is describing a different country.

None of this adds up to a figure, and that is not a gap in the writing. No public source quantifies what a marketer's advance was worth or what a compilation placement cost. Alaba's traders were photographed, reported on and filmed, and almost none of them were audited. The absence is the finding. This was a real financial system operating at national scale that left nothing behind for a bank, a court or an archivist to count.

I have the receiving end of it and cannot give you the paying end. I bought compilation discs off a vendor in Edo State, the ordinary way, cash over a counter, and the record cost more than I expected and less than I would have paid in a shop. Nobody asked me who produced it, what the split was, or whether anyone upstream had been paid. That ignorance was not a quirk of where I stood. It was the design. The chain worked by not asking, and what it cost not to ask was borne somewhere I never saw and could not have named.

5. Alternative capital allocation

Beyond the marketers, the industry ran on what the people inside it called shadow capital.

Family money supplied the first seed round, usually quietly, because that is what family money is for. Diaspora funds, sent home from relatives in London or New York, paid for the high-end videos that made a local artist look international before there was any international market to speak of. Then there were the lump-sum rights deals, where a marketer paid an artist a one-time fee for every right in a song, buying the asset for a fraction of what it might eventually be worth in exchange for cash that day. Recent academic work on how Nigerian artists and independent labels actually finance themselves describes the same arrangement: an informal economy covering production, promotion and revenue, where the money moves fast and the paperwork does not exist. One 2026 study names the condition outright, calling it financial fluidity.

Some of that money was criminal, and the culture named it before the courts did. In 2012, Olamide's second album and the label built around it took the acronym YBNL: Yahoo Boy No Laptop. A retrospective in The Native remembered how the name landed, with fierce alliance or mild apprehension depending on which side you were sitting on, and glossed it in hindsight as a man working without big budgets and the recognised tools, like an internet fraudster who had no laptop.

By 2018 the theme was established enough to have scholarship. Suleman Lazarus published a study in Criminology, Criminal Justice, Law & Society analysing lyrics from 18 Nigerian hip-hop artists to ask how the cyber-fraudster was represented in Nigerian pop.

In May 2019 the argument reached a courtroom. Naira Marley released "Am I a Yahoo Boy" with Zlatan on 3 May. Within days the EFCC raided a house in Lekki, arrested Marley and four others over suspected advance-fee fraud, and charged him with eleven counts under the Cybercrimes Act. He pleaded not guilty. Earlier that month the rapper Ruggedman had called Marley out on video for promoting internet fraud in his music. Marley answered on Instagram, mocking him and defending the artistic choice. A viral video, an Instagram reply, a police raid, court filings.

The industry's own executives had been saying a version of this for years. M.I Abaga, then chief executive of Chocolate City, put it flatly on the Loose Talk podcast in 2017: "There's no bank in the history of Nigeria that has given one Naira to any label. You're more likely to get money from a Yahoo boy." Several contemporary reports of that episode reproduced the statement, though the wording reaches us through those reports rather than the audio itself, and Abaga has since said he was misquoted. He returned to the subject on the So Nigerian podcast in August 2025, saying he had been misquoted nearly eight years earlier, that "for a lot of artists, that is the funding they have," and calling the arrangement an indictment on the country. In March 2022, the journalist Joey Akan was blunter on X: the Afrobeats Hall of Fame would never be complete without honorary mentions to the Yahoo boys who funded and kept alive an industry with no institutional or corporate funding behind it.

None of that produced a ledger. No audit anywhere tracks how much fraud money reached which studio, and this article will not invent one from rumour. The documented record is narrower and still damning: insiders who were in the room said, on the record, that the banks stayed away and the informal money filled the gap. Some of it was stolen. None of it was written down.

6. What changed when the money came

For years the global music industry looked at Nigeria and saw a piracy problem. Alaba was the evidence. What it missed was that Alaba was an extraordinarily efficient, decentralised marketing operation, and that it had been running the country's music economy at a profit while the majors were still writing position papers on piracy.

The structural arrival of international money came in four verified steps, and they are the four already named at the top of this piece. Read in order they describe a different industry. An equity round went into a label founded seven years earlier by a man who had spent a decade in the trade. A partnership followed two months later with a label that had been releasing records out of a Lagos office the whole time. A global partnership with a label run by a Senegalese-born chief executive came fifteen months after that. Then, four years on, a majority investment in the company from step one.

Four transactions in five years, and every one of them landed on somebody who already knew how to sell records in Nigeria. Each was an acquisition of something already built. What the majors were buying was a market a decade of informal traders and family-funded studios had validated on its own, and the proof was there before the cheque was.

## 7. Close

The story of Afrobeats' financing is a story about the limits of the record.

Nobody can tell you what a compilation placement cost in 2004. There is no signed contract for the first Alaba duplication deals. The early trade press and the industry blogs that covered this economy have since gone dark, and the research for this article ran straight into that wall: two of the original sources for the 2019 investment timeline stopped resolving partway through, one of them 404'd, and the other returned a page with no body on it. That rot is not incidental. It is the ordinary afterlife of a financial system that never wrote anything down.

But the absence is also the argument. The infrastructure was Africa's original venture system, built on trust, proximity and a total disregard for formal banking. It proved you did not need a bank to build an industry. You needed a network that could move money as fast as the music moved.

Afrobeats did not escape the informal economy to become global. It used the informal economy to build enough leverage to make the global economy come to it.

## Sources (for publication)

Academic — informal finance

1. Shomolu, Alajo A., "Alajo Shomolu: Money, Credit, and Banking the Nigerian Ajo Way," in Community Economies in the Global South (Oxford University Press) — academic.oup.com/book/38811/chapter-abstract/337655776

2. "Microfinance in Nigeria: Origins, Options and Opportunities" — CiteSeerX. Working paper; graded accordingly.

3. "Isusu (Igbo Credit Contribution Club), 1900–2015" — eajournals.org. A dated case study of the eastern-Nigeria parallel.

4. "Structure of Indigenous Savings Groups in Nigeria," Emerald

5. Global Informality Project, "Esusu (Nigeria)" — in-formality.com

Academic — the music economy

6. "Copyright policy and the Nigerian music industry in the era of digitalisation" — researchgate.net/publication/378580842. Source for the Alaba pivot into CD/VCD duplication and the pay-to-play compilation mechanism (section 3).

7. "Investigating Music Financing, Investment, and Returns: Economic Realities of Emerging Artists and Independent Record Labels in Nigeria," 2025 — researchgate.net/publication/396400306

8. "Floating Music Industry in Nigeria: The Financial Fluidity and Risk Assessment Mechanism," Benin Journal of Music and the Arts (2026) — publications.benjma.org. Source for "financial fluidity" in section 5.

Alaba

9. TheNET, "The rise and fall of Alaba: story of the most dreaded music market in Africa," 2015 — thenet.ng

10. P.M. News, "Big Piracy Business In Alaba Market," 2013

11. "Movie Piracy Networks at Alaba International Market" — Academia.edu. Film side; cross-reference Dossier 002.

12. Pulse, "From Alaba to digital," 26 July 2024 — pulse.ng/articles/from-alaba-to-digital-2024-07-26

13. techstoriex, "From Alaba to Algorithms: The Evolution of Music Marketing in Nigeria"

The Yahoo layer

14. YBNL = "Yahoo Boy No Laptop," Olamide's 2012 album and label

15. Esomnofu, [title to be supplied], The Native, 9 September 2022 — the "fierce alliance or mild apprehension" retrospective. Author named the writer; the article title was not captured in research. Pin before publication.

16. Lazarus, Suleman, study of Yahoo-Boy representation in the lyrics of 18 Nigerian hip-hop artists, Criminology, Criminal Justice, Law & Society 19(2): 63–80 (2018) — SSRN 3240884

17. Punch, 10 May 2019 — Ruggedman's video, Marley's Instagram reply, EFCC "Operation Cyber Storm" context

18. WithinNigeria, c. 17 May 2019 — EFCC raid, eleven counts, plea of not guilty

19. News Central TV, 13 August 2025 — M.I Abaga on So Nigerian, verbatim

20. gwg.ng, 25 March 2022 — Joey Akan on X

International capital — all four sourced to the parties' own announcements

21. Mavin Records / Kupanda Holdings multimillion-dollar equity investment, announced 30 January 2019 — musicbusinessworldwide.com; PRNewswire release dated 31 January 2019

22. Warner Music Group "pioneering partnership" with Chocolate City, announced 28 March 2019 — wmg.com newsroom; corroborated by Chocolate City's own history page

23. UMG / The Aristokrat Group strategic global partnership for recordings and publishing, announced 11 May 2020 — universalmusic.com; Music Business Worldwide

24. UMG majority investment in Mavin Global, announced 26 February 2024 — universalmusic.com; Music Business Worldwide; Afrocritik