CAPITAL MARKET FINANCING FOR SMEs: PATHWAY TO INCLUSIVE GROWTH IN NIGERIA

Nigeria emerged the largest economy in Africa following the rebasing of its Cross Domestic Product (GDP) in 2013 and in the last few years has recorded impressive growth rates relative to peer developing economies. However, this growth, largely buoyed by oil revenue, is not inclusive as it has not translated to improved standard of living for a majority of the citizens. Small and Medium Enterprises (SMEs) can play a key role in achieving inclusive growth through their contributions to job creation and poverty reduction. The survival and growth of SMEs is however a function of adequate and stable access to finance. Based on a review of available literature in the broad area of alternative financing for inclusive growth, this paper identifies the challenges of existing money market financing of SMEs in Nigeria. It asserts that the capital market has tremendous potential to drive inclusive growth by providing investors with the opportunity for wealth creation through venture capitalism. If SMEs are incentivized to list on the Stock Exchange and more individuals invest in stocks, the nation's wealth will be more broadly distributed when stocks or other financial assets rise in value.