SEC to Establish Office of Small Business Capital
By Patience Ikpeme
The Securities and Exchange Commission (SEC) has revealed that it is in advanced stages of establishing a new Office of Small Business Capital Formation.
This office will support companies looking to raise capital by granting them exempts or smaller offerings, providing customized solutions that enable small businesses and their investors to thrive together in the capital markets.
This was disclosed by Dr. Agama Emomotimi the SEC Director General, in a Goodwill Message at the 2024 National MSME Conference.
Represented by Mrs. Samiya Hassan Usman, Executive Commissioner for Corporate Services at the SEC, Dr. Agama announced that, in line with the SEC’s commitment to overcoming financing challenges for Micro, Small, and Medium Enterprises (MSMEs), the Commission is nearing the establishment of a new Office of Small Business Capital Formation.
Dr. Agama stated that this Office will spearhead practical initiatives designed to promote the growth of promising companies by utilizing capital market opportunities.
Furthermore, it will collaborate closely with small businesses and their investors, providing education and outreach to better understand and address their capital formation needs.
Agama also emphasized that crowdfunding platforms must register with the SEC and adhere to regulatory standards including accurate record-keeping.
Furthermore, the SEC has set investment limits to safeguard retail investors, which may differ depending on their net worth or income.
The SEC is prepared to assist Small and Medium Enterprises (SMEs) in offering shares to investors through online platforms, enabling backers to receive equity and participate in the companies’ growth and profits.
In line with this, the SEC’s 2021 crowdfunding guidelines outline the registration, operation, and reporting requirements for equity crowdfunding platforms.
These platforms must register with the SEC and adhere to regulatory standards, including maintaining proper record-keeping. Additionally, the SEC has established investment limits to protect retail investors, which may vary based on their net worth or income.
Dr. Agama said that the capital market can provide the long-term, patient-capital essential for MSMEs to innovate, grow, and access global markets through equity financing, bonds, and other financial instruments, noting that MSMEs can raise funds to expand operations, invest in technology, and pursue international trade opportunities.
The SEC boss stated that the Commission is “committed 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 crucial for Nigeria’s economic transformation, contributing significantly to job creation, economic diversification, and increased 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 realize their full potential and drive sustainable economic growth.”
