SEC Registers Three Crowdfunding Platforms

In a significant move aimed at bolstering the financing landscape for small businesses in Nigeria, the Securities and Exchange Commission (SEC) has registered three new crowdfunding platforms, with an additional three applications currently under review.

This announcement was made by Mr. Emomotimi Agama, the Director-General  (DG) of SEC, during a recent stakeholder’s dialogue on the role of crowdfunding in strengthening micro, small, and medium enterprises (MSMEs) finance and investment.

The dialogue, held in collaboration with the Sustainable and Inclusive Economic Development for Decent Employment in Nigeria Programme (SEDIN), focused on presenting recent assessment findings on crowdfunding and discussing strategies for enhancing MSME finance.

Mr. Agama, represented by Mr. Abdulkadri Abbas, Director of Registration, Exchanges, Market Infrastructure, and Innovation at SEC, highlighted the impact these platforms have already had on the MSME financing landscape.

“These registered platforms have facilitated the raising of close to a billion naira for various projects within a short period,” Mr. Agama noted.

“This achievement underscores our commitment to fostering innovation and providing alternative funding options for MSMEs while ensuring regulatory compliance.”

He emphasised the importance of MSMEs to Nigeria’s economy, noting their significant contributions to gross domestic product (GDP), innovation, and employment.

However, Mr. Agama acknowledged the challenges faced by crowdfunding in the country, particularly the lack of awareness about how it works and the roles of different parties involved.

“If you are a fund seeker, you’re not an intermediary,” he explained.

“To bridge the gap, there is a critical need for more awareness and capacity building on all sides.”

The dialogue saw contributions from various stakeholders, including Elizabeth Howard, Chief Executive Officer of the African Crowdfunding Association (ACfA), who called for comprehensive regulations for investment crowd funders.

Howard stressed the need for regulations to consider the entire early-stage finance and investment ecosystem, from incubators and accelerators to angel networks and diaspora investors.

“We need to have another look at regulations in Nigeria and see how we can do better,” Howard urged. “Unless the business models of all players in this ecosystem are deeply understood by the regulator, the regulatory framework will be incomplete.”

Markus Wauschuhn, Head of Programme at GIZ/SEDIN, highlighted the potential of crowdfunding while acknowledging the challenges it faces, such as regulatory compliance and financing issues. He emphasised the importance of balanced regulation to address these challenges effectively.

The event brought together over 70 key representatives from various sectors, including the SEC, government officials, financial institutions, crowdfunding platforms, MSME owners, investors, regulatory bodies, academia, research institutions, and media professionals.

The dialogue provided a platform for these stakeholders to discuss the future of crowdfunding in Nigeria and its potential to transform MSME financing.

With these new registrations, the SEC aims to create a more robust and transparent crowdfunding environment, enabling MSMEs to access much-needed capital and contribute more significantly to Nigeria’s economic growth.