The Securities and Exchange Commission and the Small and Medium Enterprises Development Agency of Nigeria have formalised a partnership to improve access to long-term financing for small and medium enterprises through the Nigerian capital market.
The Memorandum of Understanding, signed in Abuja, is expected to create new funding pathways for over 40 million registered micro, small and medium enterprises across the country. The collaboration aims to support business expansion, job creation and the Federal Government’s ambition of building a one trillion-dollar economy.
Director-General of SEC, Emomotimi Agama, said the partnership would integrate SMEs into the capital market by providing them with alternative financing options beyond traditional bank lending. He noted that sustainability and growth depend on access to capital, especially for enterprises seeking to scale.
“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 collaboration would encourage more SMEs to list on the stock exchange, enabling them to share ownership with Nigerians while promoting wealth creation and wider economic participation. According to him, the initiative aligns with President Bola Tinubu’s focus on growth, production and employment, and represents a strategic push towards a trillion-dollar economy.
SMEDAN’s Director-General, Charles Odii, described the agreement as a breakthrough for small businesses faced with expensive and scarce financing. He explained that the partnership would give entrepreneurs access to patient capital and structured financial instruments previously out of reach.
“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 structured to help MSMEs transition into the formal financial system by meeting the regulatory, governance and disclosure standards required to raise funds through equity or debt offerings. It also provides for joint capacity-building programmes, including financial literacy, corporate governance training and market readiness sessions for business owners.
Under the agreement, SEC will contribute to SMEDAN’s five-year strategic plan to promote inclusive financing and pro-SME policies, while SMEDAN will identify qualified businesses with strong growth potential and prepare them for market listing and investor engagement.
The partnership also creates an avenue for credible SMEs to issue debt securities to qualified investors, giving them access to long-term capital without relying solely on commercial loans. Both agencies will organise a national SME conference to engage stakeholders, deepen market awareness and advance policy dialogue on enterprise financing.
A Joint Working Group will be established to oversee implementation, enhance data exchange and ensure compliance with the Nigeria Data Protection Act, 2023.
The collaboration marks a significant step in repositioning the Nigerian capital market as a viable funding source for the SME sector, widely recognised as the backbone of the nation’s economy.
