Federal Government Targets Listing of 1,000 smes on Capital Market
Abuja, Nigeria – The Securities and Exchange Commission (SEC) and the Small and Medium Enterprises Progress Agency โคof nigeria (SMEDAN) have formalized a partnership aimed at bolstering financing โฃoptions for Nigeria’s vast micro, Small, and Medium โEnterprise (MSME) sector. the collaboration was cemented with the signing of a Memorandum of Understanding (MoU) in Abuja, signaling a concerted effort to unlock growth and address the challenges of accessing affordable credit faced by the nation’s over 40 million registered MSMEs.
The initiative is directly aligned with President Bola Tinubu’s governance’s ambitionโข to achieve a $1 trillion economy and โis expected to “galvanizeโฃ growth, โcreate wealth, and reduceโ unemployment” across Nigeria.
A key โขcomponent of the MoU focuses on supporting SMEs that adhere โto established regulatory and governance standards to raise capital through equity or debt securities, operating withinโ SEC guidelines. This move intends to integrateโค more small businesses into the formal financial system, fostering transparency and accountability.
dr. Emomotimi Agama,Director-General of the SEC,emphasized the importance ofโ capital for business sustainability,stating,”Capital is the bedrock of any companyโฆ We want to bring [SMEs] on board the pipelineโข of listed companies where they can democratize wealth and accelerate โdevelopment.”โ He highlighted the partnership as a crucial step towards establishing a sustainable financing โขstructure for SMEs and integrating them into the capital market โขecosystem.
Mr. Charles Odii, Director-General of SMEDAN, acknowledged the persistent issue โof expensive and limited financing options for SMEs.He announced a specific target of listing “at least 1,000 SMEs on the capital โmarket” through the collaboration, predicting this will substantially contribute to economic growth and job creation. “Capital in this part of the world is โvery expensive and scarce,” Odii noted.
The agreement outlines several collaborative efforts, including jointly organized capacity-building programs to enhanceโ SMEs’ financial literacy, governance, and understanding of capital market operations.The SEC will also contribute to SMEDAN’s five-year strategic policyโข framework, promoting inclusive financing โฃand SME-friendly market policies.SMEDAN, in turn, will identify and guide qualified SMEs through the listing process on recognized exchanges.
Furthermore,the partnership will facilitate the issuance of debt securities by eligible SMEs to qualified investors,diversifying โฃtheir funding sources beyond conventionalโ bank loans. A three-day National SME โConference, jointly hosted by both agencies,โ will serve as aโค platform forโ stakeholder โengagement, marketโ opportunity promotion, and policy reform discussions.
To ensure effective implementation and data sharing -โข in compliance with the Nigeria Data Protection Act, 2023 – a Joint Working Group (JWG) will be โestablished.
The โFederal Governmentโฃ views this partnership as instrumental in realizing the โfull potential of Nigeria’s SME sector, positioning it as a vital engine for innovation, jobโ creation, and โoverall nationalโ economic growth.
