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The Securities and Exchange Commission has expressed its readiness to support Small and Medium Enterprises, SMEs, offer shares to investors through online platforms, allowing backers to receive equity and participate in the company’s growth and profits.
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,” captures the essence of a crucial conversation that is not only timely but also transformative for the future of the economy.
Represented by Executive Commissioner, Corporate Services at the Commission, Mrs Samiya Hassan Usman, Dr. Agama said the SEC’s 2021 guidelines for crowdfunding outlines 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. Additionally, the SEC has established investment limits to protect retail investors, which may vary based on their net worth or income.
“As the apex regulator of the capital market, the Securities and Exchange Commission is committed to fostering a conducive environment for MSMEs to access capital, scale their businesses, and leverage financial technology for growth. By providing transparent, secure, and innovative financial instruments, we aim to empower these enterprises to thrive in the digital age and contribute meaningfully to Nigeria’s long-term economic prosperity.
The SEC Boss emphasised 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.
He disclosed that in line with the SEC’s commitment to addressing the financing challenges faced by MSMEs, the Commission is in the advanced stage of establishing a new Office of Small Business Capital Formation. This Office will assist companies seeking to raise capital through exempt or smaller offerings, providing tailored solutions that enable small businesses and their investors to grow and succeed together via the capital markets.
The SEC boss said the Office will champion practical initiatives aimed at fostering the development of great companies by leveraging capital market opportunities. In addition, it will work closely with small businesses and their investors, offering education and outreach to better understand and address their capital formation needs.
Agama said the event aligns with the vision of the SEC’s role in capital market development as the Commission recognises that MSMEs are the backbone of economic growth in Nigeria, and fostering their development is crucial for creating innovative, business-driven enterprise – a goal the SEC wholeheartedly supports.
“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.
“Earlier in May, 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.
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.
