In a major step toward expanding financing options for Nigeria’s small and medium-sized enterprises (SMEs), 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 facilitate long-term capital access through the Nigerian capital market.
The strategic partnership is poised to unlock alternative funding channels for over 40 million registered micro, small, and medium enterprises (MSMEs), positioning them to scale operations, create jobs, and contribute meaningfully to the Federal Government’s $1 trillion economy target.
Speaking at the MoU signing ceremony in Abuja, SEC Director-General, Dr. Emomotimi Agama, described the agreement as a pivotal move to integrate SMEs into Nigeria’s capital market ecosystem and diversify financing routes beyond traditional bank credit.
“Capital is the lifeblood of any enterprise. With over 40 million SMEs registered under SMEDAN, it’s crucial that the capital market evolves to offer them sustainable financing solutions,” Agama said. He noted that the initiative is aligned with President Bola Tinubu’s economic agenda, which emphasizes job creation, industrial expansion, and inclusive growth.
Agama further highlighted the potential for more SMEs to list on the stock exchange, democratizing ownership, deepening capital market participation, and spurring national wealth creation.
SMEDAN’s Director-General, Charles Odii, welcomed the agreement as a breakthrough for businesses struggling with limited access to affordable finance. “Capital is scarce and expensive in Nigeria. Through this collaboration, we’re opening a new financing window for medium-sized businesses. Our goal is to see at least 1,000 SMEs listed on the capital market. This will catalyze economic growth, reduce unemployment, and strengthen wealth distribution,” Odii said.
Under the terms of the MoU, the two institutions will support eligible SMEs in raising funds through equity or debt instruments in compliance with SEC regulations. The agreement also calls for joint capacity-building programs focused on financial literacy, governance, and capital market readiness.
In addition, SEC will contribute to SMEDAN’s five-year strategic plan aimed at promoting inclusive financing and SME-friendly policies. SMEDAN, in turn, will identify promising businesses and encourage their participation on regulated exchanges.
The collaboration will also facilitate the issuance of debt securities by credible SMEs to qualified investors, offering a broader range of financing options outside of traditional banking systems.
To ensure effective implementation, the MoU provides for the creation of a Joint Working Group responsible for oversight, data sharing, and compliance in line with the Nigeria Data Protection Act, 2023.
As part of the rollout, both agencies plan to convene a national SME conference, a three-day event to engage key stakeholders, deepen market awareness, and shape policy dialogue around SME financing and inclusion.
