SEC to create new office for SMEs to raise capital

The Securities and Exchange Commission (SEC) is currently at an advanced stage of establishing a new office for small businesses’ capital formation as part of efforts towards addressing the financing challenges faced by MSMEs.

According to the commission, the Office will assist companies seeking to raise capital through smaller offerings, providing tailored solutions that enable small businesses and their investors to grow and succeed through the capital markets.

Director-General of the SEC, Dr Emomotimi Agama, who stated this in a Goodwill Message at the 2024 National MSME Conference, said the theme: ‘GROW Nigerian: Sustaining a Digital and Innovation-Driven Economy,’ said the office will champion practical initiatives aimed at fostering the development of great companies by leveraging capital market opportunities.

He said the SEC will work closely with small businesses and their investors, offering education and outreach to address their capital formation needs, in line with its role of market development.

Represented by Executive Commissioner, Corporate Services at the Commission, Mrs. Samiya Hassan Usman, Dr Agama noted that as MSMEs remain the backbone of economic growth in Nigeria, fostering their development is crucial for creating innovative business-driven enterprise.

In addition, he assured that the SEC is committed to fostering a conducive environment for MSMEs to access capital, scale their businesses, and leverage financial technology for growth.

He pointed out that the commission would continue to empower these enterprises to thrive in the digital age and contribute meaningfully to Nigeria’s long-term economic prosperity by providing transparent, secure, and innovative financial instruments.

The SEC boss reiterated that the capital market can provide the long-term, patient capital necessary for MSMEs to innovate, grow, and reach global markets through equity financing, bonds, and other financial instruments, adding that MSMEs can raise funds to expand their operations, invest in technology, and explore new opportunities in international trade.

“Our presence here signifies our shared commitment to unlocking the full potential of MSMEs in Nigeria. Each of the eight key sectors of the ‘GROW Nigerian’ initiative -creative industries, agriculture, light manufacturing, fashion, education, entertainment, services, and tourism is vital for Nigeria’s economic transformation, playing a crucial role in job creation, economic diversification, and boosting exports.

“For these sectors to thrive, MSMEs need access to scalable financing solutions, with the capital market playing a pivotal role. By aligning the ‘GROW Nigerian’ initiative with capital market resources, we can empower these enterprises to unlock their full potential and drive sustainable economic growth.”

The SEC boss expressed the commission’s readiness to support SMEs, and offer shares to investors through online platforms, allowing backers to receive equity and participate in the company’s growth and profits.

The SEC’s 2021 guidelines for crowdfunding outline registration, operation, and reporting requirements for equity crowdfunding platforms. These platforms, he said, must be registered with the SEC and comply with regulatory standards, including proper record-keeping.

“Earlier in May, the SEC Nigeria, in collaboration with GIZ (German Society for International Cooperation), hosted a stakeholder dialogue on crowdfunding to strengthen MSME finance and investment. Crowdfunding is a financial innovation that allows financing by mobilizing individual savings through web/ Internet Platforms. The dialogue was honoured by the presence of sister regulators from Morocco and Ghana,” he stated.

Agama commended the efforts of the Ministry of Industry, Trade, and Investment, and SMEDAN for their unwavering commitment to the MSME sector expressing the confidence that as they work together, the outcomes of the conference will lead to the development of new strategies and partnerships that empower MSMEs and secure Nigeria’s future.