The Securities and Exchange Commission and the Small and Medium Enterprises Development Agency of Nigeria have entered into a strategic Memorandum of Understanding to enhance small business access to the Nigerian capital market.

Signed in Abuja, the agreement seeks to open up alternative financing channels for more than 40 million registered micro, small, and medium enterprises across the country.

According to a statement by the SEC on Thursday, the partnership supports the Federal Government’s drive to build a $1 trillion economy by improving access to sustainable and long-term capital.

Speaking at the signing ceremony, SEC Director-General Dr. Emomotimi Agama described capital as the “bedrock of any company,” noting that the partnership would empower SMEs to access funding, achieve sustainable growth, and contribute meaningfully to Nigeria’s wealth creation ecosystem.

“We want to bring them on board the pipeline of listed companies where they can share in the prosperity of their institutions with Nigerians,” said Agama.

SMEDAN Director-General, Mr. Charles Odii, described the partnership as a vital step toward addressing the high cost and limited availability of capital that constrain small businesses in Nigeria.

He noted that the MoU would enable entrepreneurs to explore alternative financing avenues, including opportunities to list on the capital market.

“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 disclosed that the agency plans to facilitate the listing of at least 1,000 SMEs on the Nigerian capital market, a move expected to boost wealth creation, drive industrial growth, and generate employment opportunities across the country.

The partnership will also promote the integration of SMEs into the formal financial system by helping them meet regulatory and governance standards.

It 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 remain the backbone of Nigeria’s economy, accounting for nearly 40 per year of the nation’s GDP, according to the Nigeria Economic Summit Group.

NESG Chief Economist, Dr. Olusegun Omisakin, observed that while the Central Bank’s tight monetary policies have helped curb inflation, they have also restricted private sector credit, dropping from 48 per cent in the first half of 2024 to 2.8 per cent in the same period of 2025 — leaving SMEs in a more challenging position.

He noted that many small businesses continue to face difficulties accessing finance due to stringent lending requirements and high interest rates imposed by traditional banks.

The collaboration between SEC and SMEDAN seeks to change this narrative by connecting SMEs directly with investors through equity and debt instruments regulated by the capital market.

This will enable qualified SMEs to raise funds by issuing shares or bonds on recognised exchanges, thereby reducing their reliance on bank loans.