Experts Call for Stronger Capital Market, Better Funding Access for SMEs
Financial experts and capital market stakeholders have called for deeper reforms in Nigeria’s financial markets to expand access to long-term funding for small and medium-sized enterprises and support sustainable economic growth.
The call was made in Lagos during the 30th anniversary symposium of the Association of Issuing Houses of Nigeria (AIHN), where industry leaders reviewed the development of Nigeria’s capital market and discussed strategies for making it more competitive, innovative and inclusive.
Participants identified regulatory reforms, digital technology, corporate governance and improved access to investment capital as some of the key areas requiring greater attention.
SMEs Need Easier Access to Long-Term Capital
Group Managing Director of Afrinvest West Africa, Ike Chioke, said the capital market had an important role to play in helping smaller businesses transition into stronger and more investment-ready companies.
He noted that many SMEs remain major contributors to employment and economic activity but face difficulties accessing long-term financing.
According to Chioke, businesses need incentives that would encourage them to formalise their operations, establish effective boards, maintain proper accounting systems and meet the requirements necessary to attract investors.
He particularly highlighted agriculture and local manufacturing as sectors where improved access to capital could support expansion, job creation and wealth generation.
Regulators Urged to Keep Pace With Innovation
The experts also stressed the need for Nigeria’s regulatory framework to evolve more quickly in response to technological changes.
Ozofu ‘Latunde Ogiemudia, Deputy Managing Director at Udo Udoma & Belo-Osagie, said long intervals between major legislative reforms could make it difficult for the capital market to respond effectively to new developments.
She pointed to the Investments and Securities Act 2025 as an important milestone but argued that regulation must continue to adapt as technologies such as artificial intelligence and digital investment platforms reshape the financial sector.
She also called for closer cooperation between regulators, government agencies and market operators to ensure that regulations remain relevant without discouraging innovation.
Digitalisation Changing the Investment Landscape
The Securities and Exchange Commission is also exploring ways to accommodate innovation while protecting investors.
The SEC’s Deputy Director and Head of Securities Offering, Adama Babadoko, said the commission was using tools such as regulatory sandboxes and technology-based supervision to allow new financial products to be tested within an appropriate regulatory environment.
She said investor protection, market integrity and financial stability remained central to the regulator’s approach to emerging technologies and digital assets.
Companies Encouraged to Explore Alternative Financing
The discussion also focused on the need for businesses to look beyond conventional equity financing when raising capital.
Chioke said current market conditions could provide opportunities for companies seeking to raise funds, particularly as the equities market has recorded strong performance, inflation has eased and the naira has shown greater stability.
He suggested that companies could consider a range of financing instruments, including debt and preference shares, depending on their individual funding requirements.
He noted that companies seeking medium-sized financing could potentially explore transactions in the N10 billion to N50 billion range, while larger businesses could tap both domestic and international investor pools.
Governance Remains Critical
Speakers at the symposium also warned that businesses seeking capital must strengthen their governance and reporting systems.
Ogiemudia advised SMEs to establish sound corporate structures, maintain audited financial statements and put appropriate boards in place early in their development.
Chioke similarly emphasised the importance of timely financial reporting, saying businesses that maintain accurate records and meet disclosure requirements are better positioned to respond quickly when opportunities to raise capital arise.
AIHN Seeks More Inclusive Capital Market
AIHN President and Managing Director of Investment Banking at Chapel Hill Denham, Kemi Awodein, said the association’s three-decade journey had demonstrated the important role issuing houses play in mobilising capital through public offerings, rights issues, debt transactions, mergers and acquisitions.
She called for a capital market that provides greater access to funding for SMEs, infrastructure and emerging sectors while embracing digital transformation, sustainable finance and artificial intelligence.
The SEC Director-General, Emomotimi Agama, also said technology, sustainability and stronger integration with regional and international markets would shape the next phase of Nigeria’s capital market development.
The stakeholders’ message was clear: Nigeria has significant pools of capital, but stronger institutions, innovative financial products and a larger pipeline of investment-ready businesses are needed to ensure those funds are channelled into productive economic activities.
About The Author
