THERE IS GOING TO BE MORE MONEY IN NIGERIA, HOW CAN SMEs BENEFIT FROM THIS OPPORTUNITY?

Background

On January 16, 2026, the Securities and Exchange Commission (SEC), which is the regulatory body for all capital market operators, issued revised minimum capital requirements for every category of capital market participant and set June 30, 2027 as the recapitalisation deadline.

Fund and Portfolio Management Services, Brokerage Services and Fintechs were all affected amongst others. For clarity, alternative investment fund managers such as Private Equity firms and Venture Capital firms are also subject to the new requirements.

Prior to the SEC's recapitalisation policy, the Central Bank of Nigeria (CBN) had published its own new recapitalization policy on March 28, 2024, approximately two years before the SEC published theirs. The CBN's deadline is March 31, 2026, which is just around the corner.

Both policies require all financial intermediaries (Banks) and capital market operators to hold more money as a safety cushion, because inflation over the years has eroded the real value of previously set capital thresholds. These companies must therefore raise more equity in order to ensure that their owner's capital is sufficient to support the business they intend to conduct.

In effect, the biggest capital providers and financial intermediaries in Nigeria have been directed to raise more of their own money in order to do business. It is worth noting that their core business is providing capital and financial intermediation to others.

This development should mean that businesses, including SMEs, will have access to more capital as a result of the fundraising by asset management firms and commercial banks alike. However, this will not be the case for any business that fails to position itself to benefit from the increasing capital in the financial environment.

Going forward, there will be more opportunities for businesses to access loans and attract equity investment from private equity firms and other institutional investors.

How SMEs Can Benefit From Increasing Capital in the Financial Environment.

Some of the best ways for SMEs to position themselves to benefit from the increasing capital in the financial environment are stated below.

1. Formalise and structure your business

Registration with the Corporate Affairs Commission (CAC) is the first step to take in order to benefit from the increasing capital in Nigeria. Many SMEs in Nigeria are still unstructured and many often avoid registration with the CAC for various reasons, one of which is to reduce their tax obligation. Regardless, most business owners who want to grow their businesses already know that CAC registration is the minimum requirement, as it gives them access to loans and investors. Just having a registered company does not guarantee anything, but no investor will give your business a second look if it is an unregistered entity.

2. Respect the structure

After formalising your business through registration, you need to respect the structure. You should open a dedicated bank account for the business and ensure that all business transactions run through it. You should also obtain a Tax Identification Number (TIN), as lending entities and investors will disregard any entity that has not made provisions to file and pay taxes at the appropriate time. In most cases, Nigerian banks will not open a bank account for a business that does not have a TIN.

3. Be credible and creditworthy

The creditworthiness of both a business and an individual can be assessed through credit bureaus and registries in Nigeria, as all outstanding obligations connected to your BVN are reported there. Lenders conduct credit checks by reviewing the records of these bureaus before approving loans. If you as an individual or your business has a history of not repaying loans on time, you may not benefit from the increasing capital in the financial environment.

In addition, the CBN, in a letter dated 12th March 2026, directed banks to restrict access to certain banking services for large-ticket borrowers with non-performing loans as part of efforts to safeguard financial system stability and strengthen credit discipline. This is currently restricted to large-ticket holders but it could extend to every entity in the future.

4. Be ready to play the collateral game

Collateral is one of the most important factors that lenders consider before approving and disbursing a loan. Its presence or absence can be a determining factor in the approval of a loan request. Collateral ranges from real and landed properties to movable assets such as vehicles, financial assets and guarantees. As an SME, owning a movable asset can be a significant advantage as it can be used as collateral. Some lenders will warehouse the asset while others will allow you to continue using it while it secures your loan.

5. Build a banking track record

This point has been implied earlier in this article but it deserves further explanation. Many commercial banks lend to SMEs that have maintained a relationship of over a year with them, even in the absence of collateral. Another criterion that these banks consider is transaction volume and transaction count. If an SME meets the required thresholds, some commercial banks will lend to them without collateral. However, if an SME does not run its bank account diligently over a sustained period due to concerns such as bank charges, it will miss out on this opportunity.

Commercial banks can afford to disburse sizable loan amounts based on cashflow and without collateral, and it is likely that the pool available for disbursement will increase as a direct result of the growing capital in the financial environment, driven by the recapitalisation policies of the SEC and CBN respectively.

6. Form a trade organisation

SMEs can join an existing trade union or form one with a group of other business owners. They can establish a legally recognised group such as a cooperative or a joint investment structure. By doing so, they can use their combined size and collective credibility to negotiate with asset managers, banks and investors who will view them as stronger and less risky, thereby granting them access to larger funding. Pooling funds together also gives the group greater bargaining power to negotiate better loan terms, and members can support one another with guarantees, which further reassures lenders. This approach opens the door to capital market financing that individual small businesses are usually unable to reach alone.

In conclusion, capital is currently flowing and will flow even more in the near future. It is therefore in the best interest of SMEs to be ready to access it.