Sam Philip
As part of moves to turn around the small, Medium Enterprises(SMEs) in the federation for economic development and growth, the Securities and Exchange Commission has disclosed that it would support the sector of the economy by offering shares to investors through online platforms.
The Director General of the Commission, Dr. Timi Agama disclosed that the commission would allowing backers to receive equity and participate in the company’s growth and profits.
He made the disclosure at who stated this at the 2024 National MSME Conference with the theme, “GROW Nigerian: Sustaining a Digital and Innovation-Driven Economy.”
According to him, the theme of the confab is about transformation of the nation’s economy.
Dr. Agama, who was represented by Executive Commissioner, Corporate Services at the Commission, Mrs. Samiya Hassan Usman, said the SEC’s 2021 guidelines for crowdfunding outlines registration, operation, and reporting requirements for equity crowdfunding platforms.
He explained that all the platforms, must be registered with the SEC and comply with regulatory standards, particularly proper record-keeping.
To protect retail investors, the SEC has established investment limits which is determined by net worth or income.
Dr. Agama said: “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 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
“MSMEs can raise funds to expand their operations, invest in technology, and explore new opportunities in international trade.
“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 Office will champion practical initiatives aimed at fostering the development of great companies by leveraging capital market opportunities. “It will work closely with small businesses and their investors, offering education and outreach to better understand and address their capital formation needs.
“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.”