The Securities and Exchange Commission (SEC) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) have signed a landmark Memorandum of Understanding (MoU) to improve small businesses’ access to long-term financing through the Nigerian capital market.
The agreement, signed in Abuja, seeks to open the capital market to more than 40 million registered micro, small, and medium enterprises (MSMEs) across the country, providing them with alternative and sustainable funding options.
According to a brief by the SEC, the initiative aligns with the federal government’s $1 trillion economy target, by promoting financial inclusion and enabling small businesses to tap into new capital formation opportunities.
Speaking at the signing ceremony, SEC director-general, Dr. Emomotimi Agama, underscored the importance of capital as the lifeblood of enterprise and emphasised that the collaboration will enable SMEs to raise funds, grow sustainably, and participate in wealth creation through capital market activities.
“Capital is the bedrock of any company,” Agama said. “We want to bring SMEs on board the pipeline of listed companies where they can share in the prosperity of their institutions with Nigerians. This collaboration supports President Bola Tinubu’s economic agenda centered on growth, job creation, and productivity.”
On his part, SMEDAN director-general, Mr. Charles Odii, described the MoU as a strategic milestone that will help reduce the high cost and scarcity of capital that have long constrained small businesses in Nigeria.
“Capital in this part of the world is very expensive and scarce. Through this collaboration, we are creating another source of financing for our medium-scale businesses,” Odii stated.
He added that the agency aims to facilitate the listing of at least 1,000 SMEs on the Nigerian capital market, a move expected to drive wealth creation, industrial expansion, and job opportunities nationwide.
Beyond facilitating access to finance, the partnership will help integrate SMEs into the formal financial system by supporting their compliance with regulatory and governance requirements. It also includes capacity-building initiatives such as nationwide training programmes and awareness campaigns on capital market participation, financial literacy, and corporate governance best practices.
Small and Medium Enterprises (SMEs) form the backbone of Nigeria’s economy, contributing nearly 40% to the nation’s GDP, according to the Nigeria Economic Summit Group (NESG).
NESG Chief Economist, Dr. Olusegun Omisakin, recently noted that while the Central Bank of Nigeria’s (CBN) tight monetary stance has helped moderate inflation, it has also constrained private sector credit growth — which fell from 48% in H1 2024 to 2.8% in H1 2025 — leaving SMEs struggling to access affordable funding.
The collaboration between SEC and SMEDAN aims to reverse this trend by linking SMEs directly with investors through equity and debt instruments regulated by the capital market apex body.
This means qualifying SMEs will now be able to raise funds by issuing shares or bonds on recognized exchanges, reducing their reliance on high-interest bank loans.
To ensure smooth execution, the MoU establishes a Joint Working Group (JWG) that will oversee its implementation, ensure compliance with the Nigeria Data Protection Act, 2023, and coordinate the rollout of the initiative.
Both agencies are also set to co-host a three-day National SME Conference, which will engage key stakeholders, promote investment opportunities, and refine policies aimed at making Nigeria’s capital market more inclusive and SME-friendly.
