Nigeria’s SEC Registers Three Crowdfunding Platforms
Nigeria’s Securities and Exchange Commission (SEC) on Tuesday said that it had successfully registered three crowdfunding platforms, with three additional applications currently under review.
Dr Emomotimi Agama, Director-General of SEC, confirmed this at a stakeholders dialogue on crowdfunding as a tool for strengthening Micro, Small and Medium enterprises (MSME) finance and investment in Nigeria.
The dialogue was organised by SEC in collaboration with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in Lagos.
Agama was represented by Mr Abdulkadir Abbas, Director/Head of Department, Registration Exchanges Market Infrastructure and Innovation Department of SEC.
He stated that the registered platforms had already begun to make significant contributions to the MSME financing landscape by facilitating the raising of funds for various projects. According to him, MSME operators have so far been able to source close to one billion naira through the crowdfunding framework within a short timeline.
The director general noted that this underscores the commitment of the commission to fostering innovation and providing alternative financing options for MSMEs while ensuring regulatory compliance.
“The value being contributed to national economic growth by MSMEs is phenomenal and cannot be discounted.
“Hence the premium placed on them by the Federal Government, SEC and indeed all stakeholders.
“MSMEs serve as the backbone of the economy with huge contributions to our GDP. They foster innovation and create vast employment opportunities and livelihoods for the largest mass of citizens,” he said.
According to him, notwithstanding the contributions of the sector, MSMEs oftentimes, grapple with the challenge, among others, of accessing the finance required for growth and business expansion.
Agama said that SEC had, in recognition of the transformative potential of crowdfunding as a source of financing for MSMEs, continued to take decisive steps in overseeing and promoting the orderly growth of its ecosystem in Nigeria.
He mentioned that the commission had developed and continued to review, comprehensive rules and regulations that provide a robust framework for the operation of crowdfunding platforms.
The director general said this is with a strong emphasis on ensuring transparency, investor protection, and market integrity.
Agama appreciated GIZ/Sustainable and Inclusive Economic Development for Decent Employment in Nigeria Programme (SEDIN) and all other partners, for the strong collaboration in seeing that the dialogue comes to fruition.
He assured that SEC would commit to fostering a collaborative environment that will drive positive changes and innovation in the MSME financing landscape, going forward.
“I am convinced that the outcomes of this dialogue will be instrumental in shaping our regulatory approaches going forward, guiding policymakers, empowering investors, and supporting MSMEs in leveraging crowdfunding as a viable financing option,” he said.
In his opening remarks, Mr Markus Wauschkuhn, Head of Programme, GIZ/SEDIN, said that the stakeholder dialogue sought to present assessment findings and engage stakeholders in collaborative discussions to amplify MSME finance through crowdfunding.
Wauschkuhn noted that in recent years, crowdfunding has emerged as a promising alternative source of financing for MSMEs. He explained that crowdfunding platforms allow entrepreneurs to raise funds from many individuals or investors, often through online platforms.
According to him, this approach democratises access to capital, enabling MSMEs to bypass traditional financing channels and connect directly with potential investors.
“The primary goal of the stakeholders’ dialogue is to present recent assessment findings on crowdfunding for strengthening MSME finance and investment in Nigeria to key stakeholders, with a specific emphasis on engaging SEC.
“The dialogue also aims to foster collaboration between the public and private sectors to augment MSME finance through crowdfunding”.
According to him, up to 70 participants, drawn from SEC, government officials, financial institutions, crowdfunding platforms, MSME owners, investors, regulatory bodies, academia, research institutions, and media professionals attended the dialogue.
Recall that on Jan.21, 2021, the SEC published its approved Rules on Crowdfunding following the release of its draft exposure rules on crowdfunding on March 28, 2020. The regulatory framework allows private companies with the required structure and mechanism in place to raise capital from the public through crowdfunding
SEC is the main regulatory institution of the Nigerian capital market, tasked with safeguarding the interests of investors and upholding the integrity of the system.
GIZ SEDIN aims to increase the employment and income of MSMEs in Nigeria by supporting them in the areas of policy, business development services, access to markets, access to finance and support to improved infrastructure for business activities. #Nigeria’s SEC Registers Three Crowdfunding Platforms
