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 improve access to long-term financing for small and medium enterprises (SMEs) through the Nigerian capital market.
This partnership aims to create alternative sources of capital for 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.
The Director-General of SEC, Dr. Emomotimi Agama, stated that the initiative would open new funding routes for SMEs and integrate them into the capital market ecosystem.
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.
SMEDAN Director-General, Charles Odii, said the MoU would enable small businesses to overcome the high cost and scarcity of capital by leveraging the capital market.
He noted that capital is very expensive and scarce in this part of the world, and through this collaboration, they are creating another source of financing for medium-scale businesses.
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.
The partnership will improve access to long-term financing by supporting qualifying MSMEs to raise funds through equity or debt securities under SEC regulations.
Both agencies will organize training and awareness programs to educate SMEs on capital market participation, financial literacy, and corporate governance.
The SEC will contribute to SMEDAN’s five-year strategic policy framework to promote inclusive financing and SME-friendly capital market policies.
SMEDAN will identify and encourage qualifying SMEs to list on recognized 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.
A Joint Working Group (JWG) will be established to monitor the implementation of the MoU, ensuring compliance with the Nigeria Data Protection Act, 2023.
Both agencies will also co-host a three-day national SME conference to engage stakeholders, promote market opportunities, and drive policy discussions.
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