The Memorandum of Understanding (MoU), signed in Abuja, is designed to provide alternative funding channels for over 40 million registered MSMEs nationwide, enabling them to scale their operations, generate employment, and contribute to the Federal Government’s ambition of achieving a $1 trillion economy.
SEC Director-General, Dr. Emomotimi Agama, described the collaboration as a crucial step toward integrating smaller businesses into the capital market ecosystem. He said the initiative would help many enterprises overcome the challenge of limited capital by creating new pathways to raise funds through the market.
“Capital is the bedrock of any company. We have about 40 million SMEs duly registered with SMEDAN, and it is important that the capital market provides a route for these enterprises to raise funds for sustainability,” Agama stated. He added that the move would encourage more SMEs to list on the Nigerian Exchange, fostering wealth creation and national economic growth.
The SEC chief further noted that the partnership aligns with President Bola Tinubu’s economic agenda, particularly in the areas of employment generation, industrial expansion, and inclusive growth.
Echoing similar sentiments, SMEDAN Director-General, Charles Odii, hailed the initiative as a lifeline for small businesses grappling with high borrowing costs and limited access to credit. “Capital in this part of the world is expensive and scarce. Through this collaboration, we are creating another financing window for medium-scale businesses. Our target is to have at least 1,000 SMEs listed on the capital market to drive wealth creation and reduce unemployment,” Odii explained.
The MoU outlines specific frameworks to support qualified SMEs in raising capital through equity and debt instruments under SEC regulations. It also includes joint capacity-building programmes focused on financial literacy, corporate governance, and capital market readiness.
Under the agreement, the SEC will contribute to SMEDAN’s five-year strategic plan to promote inclusive financing, while SMEDAN will identify credible enterprises suitable for market listing. The partnership will also enable vetted SMEs to issue debt securities to qualified investors, offering them more financing options beyond conventional bank loans.
Both agencies also announced plans to host a three-day national SME conference to engage key stakeholders, foster policy dialogue, and deepen participation in the capital market.
To ensure effective implementation, the MoU provides for the establishment of a Joint Working Group that will oversee progress, coordinate data sharing, and maintain compliance with the Nigeria Data Protection Act, 2023.
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