(Bloomberg) — Nigeria’s Securities and Exchange Commission is considering easing regulations on crowdfunding to allow small businesses to raise financing more cheaply amid rising interest rates.

Small and medium-sized businesses have been unable to take advantage of rules introduced in 2021 to enable raising debt and capital online through crowdfunding because they are too restrictive, SEC Director General Emomotimi Agama said. in an interview in Lagos. , the commercial center of the country. Limits on the amount that could be collected were also seen as a constraint, he said.

“We’re going with a new look right now to make it a little easier for people to get in,” Agama said. The new draft rules could be published as early as the first quarter of 2025.

Nigeria’s central bank has raised its policy rate by 15.75 percentage points since May 2022, to a record high of 27.25%, in a bid to curb rising inflation to its highest level since two decades. Small businesses can pay more than 30% annual interest on their loans, which many cannot afford.

Other options for raising capital, such as listing on a stock exchange or issuing debt securities, come with too many costs and regulatory requirements.

Current regulations only allow companies with at least two years’ experience to raise a maximum of 100 million naira ($61,000) per year through crowdfunding, according to Agama. The ceiling can be raised for businesses “on a case-by-case basis,” he said.

©2024 Bloomberg LP