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 of nigeria (SMEDAN) have formalized a partnership aimed at bolstering financing options for Nigeria’s vast micro, Small, and Medium Enterprise (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 ambition to achieve a $1 trillion economy and is expected to “galvanize growth, create wealth, and reduce unemployment” across Nigeria.
A key component of the MoU focuses on supporting SMEs that adhere to established regulatory and governance standards to raise capital through equity or debt securities, operating within SEC guidelines. This move intends to integrate more small businesses into the formal financial system, fostering transparency and accountability.
dr. Emomotimi Agama,Director-General of the SEC,emphasized the importance of capital for business sustainability,stating,”Capital is the bedrock of any company… We want to bring [SMEs] on board the pipeline of listed companies where they can democratize wealth and accelerate development.” He highlighted the partnership as a crucial step towards establishing a sustainable financing structure for SMEs and integrating them into the capital market ecosystem.
Mr. Charles Odii, Director-General of SMEDAN, acknowledged the persistent issue of expensive and limited financing options for SMEs.He announced a specific target of listing “at least 1,000 SMEs on the capital market” through the collaboration, predicting this will substantially contribute to economic growth and job creation. “Capital in this part of the world is very expensive and scarce,” Odii noted.
The agreement outlines several collaborative efforts, including jointly organized capacity-building programs to enhance SMEs’ financial literacy, governance, and understanding of capital market operations.The SEC will also contribute to SMEDAN’s five-year strategic policy framework, promoting inclusive financing and 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 their funding sources beyond conventional bank loans. A three-day National SME Conference, jointly hosted by both agencies, will serve as a platform for stakeholder engagement, market opportunity promotion, and policy reform discussions.
To ensure effective implementation and data sharing - in compliance with the Nigeria Data Protection Act, 2023 – a Joint Working Group (JWG) will be established.
The Federal Government views this partnership as instrumental in realizing the full potential of Nigeria’s SME sector, positioning it as a vital engine for innovation, job creation, and overall national economic growth.
