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The Securities and Exchange Commission and the Small and Medium Enterprises Development Agency of Nigeria have signed a Memorandum of Understanding aimed at improving access to long-term financing for small and medium enterprises through the Nigerian capital market.
The partnership is expected to create alternative funding sources for over 40 million registered micro, small, and medium enterprises in the country, enabling them to expand their operations, create jobs, and contribute meaningfully to the Federal Government’s $1tn economy target.
Speaking at the signing ceremony in Abuja, the Director-General of SEC, Emomotimi Agama, said the collaboration would open up new financing routes for small businesses and integrate them into the nation’s capital market ecosystem.
“Capital is the bedrock of any company. Today, we have about 40 million small and medium enterprises duly registered with SMEDAN. It is important that, as a capital market, we find a route for these enterprises to raise capital for sustainability,” Agama said.
He added that the move would also encourage more SMEs to list on the stock exchange, allowing them to share ownership with Nigerians while promoting wealth creation and economic expansion.
“This partnership aligns with President Bola Tinubu’s agenda on employment, growth, and production. It is a critical step toward achieving the administration’s trillion-dollar economy vision,” he added.
On his part, the Director-General of SMEDAN, Charles Odii, described the initiative as a major breakthrough for small businesses struggling with the high cost and scarcity of capital.
“Capital in this part of the world is very expensive and scarce. 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,” Odii said.
The MoU is designed to integrate MSMEs into the formal financial system and help them meet the regulatory and governance standards required to access the market.
Key features of the agreement include improving access to long-term capital by supporting qualified SMEs to raise funds through equity or debt instruments under SEC regulations. It also provides for capacity-building programmes, with both agencies set to conduct training and awareness sessions on financial literacy, governance, and capital market participation.
In addition, the SEC will contribute to SMEDAN’s five-year strategic framework to promote inclusive financing and SME-friendly policies, while SMEDAN will identify and encourage qualified businesses to list on recognised exchanges to access funds and expand their operations.
The partnership will also enable credible SMEs to issue debt securities to qualified investors, providing more financing options beyond traditional bank loans.
Both institutions plan to jointly organise a three-day national SME conference to engage stakeholders, promote market opportunities, and deepen policy discussions.
The agreement further provides for the creation of a Joint Working Group to monitor implementation and ensure data-sharing compliance in line with the Nigeria Data Protection Act, 2023.
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