By Bassey Udo
Over 40 million registered micro, small, and medium enterprises (MSMEs) are to benefit from improved access to financing, as the Securities and Exchange Commission (SEC) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have signed a Memorandum of Understanding (MoU) to grant them access to the Capital market.
The Director-General of the SEC, Dr. Emomotimi Agama, who disclosed this at the MoU signing ceremony in Abuja, said the initiative would open new funding routes for SMEs and integrate them into the capital market ecosystem.
Agama said this was part of the strategy by the two agencies to expose operators of small businesses to alternative sources of capital through improved access to long-term financing from the Nigerian capital market.
He said the partnership would help build the capacity of SMES to grow, create jobs, and contribute to the Federal Government’s target of building a $1 trillion economy.
“Capital is the bedrock of any company. Today we have about 40 million Small and Medium Enterprises that are duly registered with 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.
“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 to lead to the growth of the economy,” he stated.
The SEC DG said the collaboration with SMEDAN aligns with the present administration’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, SMEDAN Director-General, Mr. Charles Odii, said the MoU would enable small businesses to overcome the challenges of high cost of operations and scarcity of capital by leveraging the opportunities in 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 galvanize growth, create wealth, and reduce unemployment in Nigeria.”
The agreement between the two agencies, he said, would deepen the integration of MSMEs into the formal financial system and help them meet regulatory and governance standards required for effective market participation.
He listed the major benefits of the MoU to include improved access to long-term financing by supporting qualifying MSMEs to raise funds through equity or debt securities under SEC regulations; providing for capacity building, as both agencies would organize training and awareness programsme to educate SMEs on capital market participation, financial literacy, and corporate governance.
Also, the SEC would contribute to SMEDAN’s five-year strategic policy framework to promote inclusive financing and SME-friendly capital market policies.
SMEDAN, on its part, would identify and encourage qualifying SMEs to list on recognized exchanges, expanding their access to funding and business growth opportunities.
Besides, the collaboration would facilitate debt market participation by guiding creditworthy SMEs to issue debt securities to qualified investors, thereby widening their financing options beyond traditional bank loans.
Under the terms of the MoU, both institutions would jointly organize 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.
