By Peter Egwuatu

Director General of the Securities and Exchange Commission (SEC), Arunma Oteh has advised governments in the emerging economies to focus more on Small and Medium Enterprises development as a way of creating more jobs and improving the standards of living of their citizens.

Ms Arunma Oteh, DG, SEC

Oteh who spoke on the sidelines of the ongoing International Organisation of Securities Commissions (IOSCO) annual meeting in Rio de Janeiro, Brazil, said SMEs are vehicles for wealth creation which could in turn improve the economies of many countries.

According to a statement made available to Vanguard, the SEC DG said “I think first and foremost, there is the recognition globally about the importance of SMEs because they are the ones who create jobs.

I think there is a greater focus on how SMEs can be supported. In our own country, His Excellency President Goodluck Ebelo Jonathan recently set up an SME council, he set up a job board, all of that is focused on how we can practically address the challenges we are facing with SMEs”.

To grow these SMEs therefore, the SEC boss said she believes that the capital markets is an absolutely important solution to source funds among other othernatives.

Continuing she said “We need to provide funding at reasonable cost. Capital that is patient so that people can grow their businesses and banking finance is not patient. It is short term, sometimes particularly in the Africa and Middle East the interest rates are relatively high. “What we need is capital that would be there for a long time, a market based finance that is long term and there is a global recognition of that which is why some of the things we are focusing at the meeting in Brazil,is really the value that capital markets bring to SMEs”.

Oteh said it would be good to enable SMEs by having them list which is why a lot of the discussions around how to better support SMEs to list on the Nigerian Stock Exchange.

“Also, the alternative securities market modelled after what you have in the UK, the one in Johannesburg where you have got one enterprise that have advisers who basically nurture them and guide them through the process of listing on the exchange and staying on the exchange.

“You have models like what you have in Egypt where you have a dedicated exchange, the Nile Exchange to SMEs. But some of the more interesting thing we are seeing is Crowd Funding being able to raise money via internet by people who basically are interested in that particular initiative. We are seeing in a number of Asian countries the securitisation of loans that are given by SMEs. There is a lot of best practise around the world, but there is also lessons from experiences that have not gone well which are useful” she said.