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.

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The motion was raised during a plenary session on Tuesday by Hon. Emeka Godwin, who represents the Onitsha North and South Federal Constituency in Anambra State. He expressed concern over the current state of the IDCs, many of which have been neglected for years. Some have even been taken over by private individuals and organisations.

Hon. Godwin cited the Osogbo IDC as a key example. Established in 1976 on 70 hectares of land, it was developed through a partnership between the Federal Government, the United Nations Industrial Development Organisation (UNIDO), and the United Nations Development Programme (UNDP). It was intended to offer technical support to small industries. However, like other centres in Owerri, Zaria, and Maiduguri, it has been left idle and the equipment has become outdated or damaged.

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According to Godwin, the purpose of these centres was to promote local industrialisation, reduce the demand for foreign goods, and create jobs. Unfortunately, those goals have not been achieved. Despite being handed over to the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), little action has been taken to restore them.

He warned that unless urgent steps are taken, the country risks losing the long-term benefits these centres were designed to provide. These include skills development, business support, and economic growth.

Following the motion, the House directed the Committee on Industry to investigate the issue. The committee is expected to assess the state of the IDCs, propose ways to revitalise them, and report back within four weeks.

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