SEC, SMEDAN move to improve over 40m SMEs access to capital
Emomotimi Agama, Director General of the Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have signed a Memorandum of Understanding (MoU) aimed at improving access to long-term financing for small and medium enterprises (SMEs) through the Nigerian capital market.
The partnership is designed to create alternative sources of capital for the country’s over 40 million registered micro, small, and medium enterprises (MSMEs), helping them grow, create jobs, and contribute to the Federal Government’s $1 trillion economy target.
Speaking at the signing ceremony in Abuja, Emomotimi Agama, Director General, SEC said the initiative would open new funding routes for SMEs and integrate them into the capital market ecosystem.
“Capital is the bedrock of any company. Today, we have about 40 million Small and Medium Enterprises that are duly registered with the Small and Medium Enterprises Development Agency of Nigeria, and it is important that, as a capital market, we are able to find a route for these small and medium-scale enterprises to be able to raise capital for sustainability.
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“We also want to bring them on board the pipeline of listed companies in Nigeria, where they will be able to democratize wealth and share a part of their institutions with Nigerians, making sure that development is faster and leads to the growth of the economy,” he stated.
He added that the collaboration aligns with President Bola Tinubu’s agenda on employment, growth, development, and production, describing it as a critical step toward achieving the administration’s trillion-dollar economy vision.
On his part, Charles Odii, Director General, SMEDAN, said the MoU would enable small businesses to overcome the high cost and scarcity of capital by leveraging the capital market.
“Capital in this part of the world is very expensive and scarce,” Odii said. “Through this collaboration, we are creating another source of financing for our medium-scale businesses. We have set ourselves a target of at least 1,000 SMEs listing on the capital market. This will galvanise growth, create wealth, and reduce unemployment in Nigeria,” he added.
The agreement between the two agencies seeks to deepen the integration of MSMEs into the formal financial system and help them meet regulatory and governance standards required for market participation.
Among its major benefits, the MoU will improve access to long-term financing by supporting qualifying MSMEs to raise funds through equity or debt securities under SEC regulations. It also provides for capacity building, as both agencies will organise training and awareness programs to educate SMEs on capital market participation, financial literacy, and corporate governance.
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In addition, the SEC will contribute to SMEDAN’s five-year strategic policy framework to promote inclusive financing and SME-friendly capital market policies. SMEDAN, on its part, will identify and encourage qualifying SMEs to list on recognised exchanges, expanding their access to funding and business growth opportunities.
The collaboration will also facilitate debt market participation by guiding creditworthy SMEs to issue debt securities to qualified investors, thereby widening their financing options beyond traditional bank loans. Both institutions will jointly organise a three-day national SME conference to engage stakeholders, promote market opportunities, and drive policy discussions.
The MoU further provides for the establishment of a Joint Working Group (JWG) to monitor implementation, as well as mechanisms for data sharing in line with the Nigeria Data Protection Act, 2023.
