The Securities and Exchange Commission has partnered with the Nigeria Police Force to launch a nationwide crackdown on Ponzi schemes, unregistered investment platforms, and crypto-related frauds, as part of efforts to protect small businesses and retail investors. The coordinated action is aimed at reducing financial losses suffered by SMEs and informal business owners who are often targeted by fraudulent schemes.
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According to the SEC, the operation will involve investigations, enforcement actions, arrests, and public awareness campaigns. The regulator stated that fraudulent investment platforms have continued to exploit gaps in financial literacy and weak enforcement, drawing funds away from productive business activities.
Officials noted that many small business owners have lost working capital to Ponzi schemes, affecting operations, employment, and business survival.
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Impact of fraud on small businesses
SMEs form the backbone of Nigeria’s economy, yet many operate with limited access to formal financing. As a result, business owners often turn to informal investment opportunities promising quick returns to support cash flow and expansion.
Regulators say these conditions have made SMEs vulnerable to unregistered investment schemes that promise fixed or unrealistic returns. Losses from such schemes frequently result in business closures, unpaid salaries, and inability to repay legitimate loans.
The SEC stated that the crackdown is intended to discourage fraudulent operators while restoring confidence in regulated investment channels. The commission emphasised that only platforms registered and supervised by regulators should be trusted with business funds.
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Enforcement and public awareness measures
Under the partnership, the Nigeria Police Force will support intelligence gathering, arrests, and prosecution of offenders. The SEC will also intensify public education efforts, focusing on how business owners can identify unregistered schemes and verify investment products.
Officials explained that enforcement alone is not sufficient, stressing the importance of financial education for SMEs. Planned awareness programmes will target markets, trade associations, and SME clusters across the country.
The commission has urged entrepreneurs to report suspicious schemes and confirm registration status before committing funds.
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Implications for Nigeria’s SME ecosystem
Analysts say stronger enforcement could help redirect capital toward legitimate financial products such as bank loans, cooperative financing, and regulated capital market instruments. This could improve access to sustainable funding for SMEs over time.
However, experts also note that fraud prevention must be complemented by improved access to affordable credit. Without viable financing alternatives, small businesses may continue to seek risky investment options.
The SEC stated that protecting SMEs remains central to its mandate, as small businesses contribute significantly to employment and economic activity.
As enforcement actions increase, regulators believe the initiative will reduce financial crimes, strengthen investor protection, and support a safer operating environment for Nigerian SMEs in 2026.
