SEC, SMEDAN Partner to Boost SME Access to Long-Term Capital 

By Oluwakemi Kindness

The Securities and Exchange Commission (SEC) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have entered into a strategic partnership to enhance access to long-term financing for small and medium enterprises (SMEs) through the Nigerian capital market.

The Memorandum of Understanding (MoU), signed in Abuja, seeks to create alternative funding sources for over 40 million registered micro, small, and medium enterprises (MSMEs) in Nigeria.

The move is expected to help drive job creation, boost productivity, and support the Federal Government’s $1 trillion economy target.

According to a statement on Thursday by the commission, SEC Director-General, Dr. Emomotimi Agama, while speaking at the occasion described the collaboration as a critical step toward integrating SMEs into the capital market ecosystem.

“Capital is the bedrock of any company. It is important that as a capital market, we find routes for small and medium enterprises to raise funds for sustainability,” Agama said.

“We also want to bring them on board the pipeline of listed companies in Nigeria to democratize wealth, accelerate development, and grow the economy,” he added.

Dr. Agama noted that the initiative aligns with President Bola Tinubu’s economic agenda focused on job creation, growth, and industrial development.

On his part, SMEDAN Director-General, Charles Odii, said the agreement would help small businesses overcome the challenges of high capital costs and limited funding options.

“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 medium-scale businesses. Our target is to have at least 1,000 SMEs listed on the capital market. This will galvanize growth, create wealth, and reduce unemployment.”

The MoU outlines several key areas of cooperation, including improving SMEs’ access to long-term financing through equity and debt securities, organizing capacity-building programs, and enhancing financial literacy and corporate governance among MSMEs.

Under the agreement, SEC will contribute to SMEDAN’s five-year strategic policy framework to promote inclusive and SME-friendly capital market policies. SMEDAN will also identify and support qualified SMEs to list on recognized exchanges, giving them greater access to funding and growth opportunities.

The collaboration will further open the debt market to credible SMEs by guiding them to issue debt securities to investors, thereby expanding their financing options beyond traditional bank loans.

To drive awareness and stakeholder engagement, both agencies will jointly host a three-day national SME conference to promote market participation and policy dialogue.

The MoU also provides for the creation of a Joint Working Group (JWG) to oversee implementation, as well as a data-sharing frameworkcompliant with the Nigeria Data Protection Act, 2023.