Nigeria's CAC and SMEDAN Roll Out Free Registration for 250,000 MSMEs

When Corporate Affairs Commission teamed up with Small and Medium Enterprises Development Agency of Nigeria to launch a free business registration drive, the buzz in Abuja was palpable.

The initiative, announced on the free registration launchAbuja, targets 250,000 nano, micro and small enterprises across all 36 states and the Federal Capital Territory. With the Federal Government of Nigeria footing the bill, about ₦3 billion in registration fees will be waived, effectively removing a major barrier that keeps many entrepreneurs in the informal sector.

Why Formalisation Matters: Background and Need

Nigeria’s MSME sector contributes roughly 48 % of GDP, yet less than 25 % of those firms are formally registered, according to a 2024 World Bank report. The gap translates into limited access to credit, insurance and government contracts. As Prof. Chinedu Okafor, an economist at the University of Lagos, put it, “Formal registration is the passport that unlocks financing and market opportunities. Without it, businesses remain invisible to policymakers.”

Previous attempts to boost registration—such as the 2022 tax incentive program—proved half‑hearted because the initial cost of filing a name (around ₦12,000) still deterred cash‑strapped founders. The new scheme attacks that hurdle head‑on, making the first step literally free.

Details of the Free Registration Scheme

• Eligibility: Any nano, micro or small enterprise operating in Nigeria that does not already have a CAC‑issued name.
• Scope: Covers all 36 states plus the FCT, with on‑the‑ground support in state offices and Business Clinics.
• Funding: Roughly ₦3 billion in registration fees waived by the CAC.
• After‑care: Automatic entry into SMEDAN’s MSME database, unlocking grants, training, technical assistance and market linkages.
• Tax Relief: A 2026 tax framework will raise the exemption threshold for small businesses to ₦5 million annual turnover.

Applications are now open via the portal portal.smedan.gov.ng. Entrepreneurs who cannot navigate the online system can receive hands‑on help at any SMEDAN state office or through designated Business Clinics that operate in community centres and market squares.

Existing SMEDAN database members who lack a CAC registration are automatically enrolled for the free name service—a move designed to streamline the onboarding process and avoid duplication.

Voices from the Ground: Reactions from Entrepreneurs and Industry

"I’ve been running a home‑based tailoring shop in Kano for three years, but without a formal name I couldn't apply for a loan," said Ms. Aisha Bello, owner of a micro‑enterprise. "This program means I can finally register my business at no cost and start talking to banks."

SMEDAN’s Director‑General, Dr. Abdullahi Yusuf, emphasized that registration is just the first layer. "Our database not only records your name, it connects you to conditional grants, mentorship programmes and even private‑sector investors looking for vetted partners," he told reporters.

Meanwhile, the CAC’s Registrar, Mr. Nnamdi Okeke, highlighted the administrative side: "We’ve upgraded our online portal to handle a surge of up to 1,200 submissions per day. The staff in each state have also received training to expedite verification."

Economic Impact: What the Numbers Say

Assuming an average annual revenue increase of 12 % for newly formalised firms—a conservative estimate drawn from the 2021 SME Formalisation Study—the scheme could inject roughly ₦1.5 trillion into the economy over the next five years. That translates into additional tax revenue, higher employment, and a more diversified export base.

Financial institutions have already signaled interest. The Central Bank of Nigeria’s SME Credit Desk announced a tentative ₦500 billion loan facility that will prioritize businesses appearing in the SMEDAN database, provided they hold a CAC‑issued name.

Next Steps and Potential Challenges

While the rollout is ambitious, several hurdles remain. First, the digital divide: roughly 40 % of Nigeria’s small‑business owners lack reliable internet access. To bridge that gap, SMEDAN is deploying mobile registration units equipped with satellite connectivity.

Second, awareness: a recent survey by the Nigerian Institute of Management found that 38 % of micro‑entrepreneurs were unaware of the free registration offer two weeks after the launch. The government plans a nationwide radio and TV campaign, complemented by social‑media outreach in Hausa, Yoruba and Igbo.

Finally, the upcoming tax reform slated for 2026 could cause confusion if thresholds shift again. Officials have pledged a “clear communication toolkit” for tax authorities and business advisors to keep entrepreneurs informed.

Historical Context: From Policy to Practice

The free registration drive builds on a decade of policy experiments aimed at shrinking Nigeria’s informal economy. In 2017, the National Economic Empowerment and Development Initiative (NEEDI) launched a pilot in Lagos that reduced registration costs by 50 % but fell short of scaling nationwide. The current partnership between CAC and SMEDAN represents the most comprehensive effort to date, marrying regulatory goodwill with a robust after‑care ecosystem.

Analysts point out that the timing aligns with Nigeria’s “Vision 2030” roadmap, which earmarks MSMEs as the engine of job creation. By formally integrating 250,000 businesses, the government hopes to accelerate that vision by a full decade.

Key Takeaways

• Free registration covers 250,000 nano, micro and small firms across all states.
• ₦3 billion in fees waived, funded by the CAC.
• Automatic entry into SMEDAN’s database unlocks grants, training and loan access.
• 2026 tax reforms will raise exemption thresholds, further easing burdens.
• Support channels include online portal, state offices and mobile Business Clinics.

Frequently Asked Questions

Who is eligible for the free business registration?

Any nano, micro or small enterprise operating in Nigeria that does not already have a name issued by the Corporate Affairs Commission qualifies. Existing SMEDAN‑listed businesses without a CAC registration are automatically enrolled.

How can entrepreneurs apply if they lack internet access?

Applicants can visit the nearest SMEDAN state office or a designated Business Clinic. Mobile registration units, equipped with satellite connectivity, travel to remote markets on a weekly schedule.

What after‑care services are provided once a business is registered?

Registered firms are entered into SMEDAN’s MSME database, giving them access to conditional grants, sector‑specific training, technical advisory, market‑linkage platforms and priority consideration for the Central Bank’s SME loan facility.

What changes are coming in the 2026 tax framework?

The 2026 tax reform will raise the annual turnover exemption threshold for small businesses to ₦5 million, meaning firms below that level will be exempt from corporate tax, easing financial pressure as they grow.

How will the program be monitored for success?

Both CAC and SMEDAN will publish quarterly dashboards tracking the number of registrations, grant disbursements, loan uptake and employment outcomes. Independent auditors from the National Bureau of Statistics will verify the data.