Onome Amuge
Nigeria’s small business financing ecosystem is on the verge of transformation as the Securities and Exchange Commission (SEC) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) formalised a partnership to help small and medium enterprises (SMEs) access long-term funds through the capital market.
The Memorandum of Understanding (MoU), signed in Abuja, seeks to bridge the difficulty small businesses face in securing affordable financing to scale operations and create jobs. With over 40 million registered micro, small, and medium enterprises (MSMEs) contributing nearly half of the country’s GDP, policymakers view the sector as critical to President Bola Tinubu’s ambition of building a $1 trillion economy.
Emomotimi Agama, SEC’s director-general,said the initiative was part of the Commission’s drive to democratise wealth creation by linking small businesses to the capital market. “Capital is the bedrock of any company. We want to find a route for these enterprises to raise capital sustainably and to integrate them into the pipeline of listed companies, so they can share in the nation’s economic growth,” Agama said.
He described the collaboration as consistent with the administration’s reform agenda on employment, productivity, and inclusive growth. “By empowering MSMEs with access to market-based financing, we are enabling faster development and a more diversified economy,” he added.
SMEDAN considers the partnership as a strategic opportunity to lower barriers for entrepreneurs struggling with Nigeria’s high cost of capital. “Capital in this part of the world is expensive and scarce. This collaboration creates a viable alternative for medium-scale enterprises. Our goal is to see at least 1,000 SMEs list on the capital market, creating jobs, building wealth, and driving economic resilience,” said SMEDAN DG Charles Odii.
The MoU outlines a framework for integrating MSMEs into Nigeria’s capital market ecosystem through both equity and debt financing channels. Eligible enterprises will be supported to raise funds via listings or bond issuances, with guidance from SEC and SMEDAN on regulatory compliance, governance standards, and investor relations.
As part of the initiative, the two agencies will also conduct nationwide training programmes on financial literacy, capital market education, and corporate governance to prepare SMEs for market participation. The SEC will collaborate with SMEDAN to embed SME financing priorities into its five-year strategic plan, promoting inclusive capital market policies and easing regulatory entry points for small businesses.
Beyond equity participation, the agreement aims to help creditworthy SMEs issue debt instruments to qualified investors, expanding their access to long-term funding and reducing dependence on commercial bank loans. Both institutions will co-host a national SME conference later this year to engage stakeholders and refine policy frameworks that support business growth through market-based financing.
To ensure accountability and effective rollout, a Joint Working Group (JWG) will be established to oversee implementation, supported by data-sharing arrangements compliant with the Nigeria Data Protection Act, 2023.
