2019 TIA Meet Up Explores Deepening Financial Inclusion In Nigerian Capital Market

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Friday, October 18, 2019 / 01.10PM / Nifemi Taiyese for Proshare WebTV  / Header Image Credit: WebTV

 

Market stakeholders in Nigeria agreed that financial inclusion must constitute the core in capital market activities in the country, post- 2008 crisis era.

This was part of the discourse at the Third Edition of the Annual Traders, Investors & Analysts (TIA) Meet-Up Conference 2019 which took place at the Nigerian Stock Exchange on October 16, 2019.

The event which was powered by Trendonomics in partnership with the Institute of Directors, Nigeria, AFEX Commodities Exchange, Anchoria, TRW, Forte Financial amongst others brought together market players, regulators and industry players.

In his opening remarks, the Divisional Head, Business for the Stock Exchange, Mr. Jude Chiemeka said the conference is a platform that provides a market knowledge sharing experience for industry experts and participants.

Mr. Chiemeka said the NSE is adopting different mechanisms and methods to educate people especially retail investors on the market and opportunities that exists. He further stated that the NSE is contributing to policy development and implementation aimed at reducing financial exclusion in the country.

On financial literacy, he said the approach of the NSE is to develop millennials to actively participate in the capital market, adding that it is in full support of the TIA forum because it is  helping  to create a world class capital market, that  will increase investors awareness of the  transparency and accountability that is entrenched in the exchange.

The Acting Director-General, Securities and Exchange Commission (SEC), Ms. Mary Uduk ably represented by Dr.  Afolabi Olowookere, Head, Research noted that financial inclusion is central for economic growth and development.

Speaking further, the SEC representative said for an economy to grow, savings and investment is very important, as the rate of financially included people need to be increased in the country.

Dr Olowookere said financial deepening will encourage people to participate in the Nigerian capital market. Looking at the statistics of the Nigerian population, SEC believed that there is need to deepen the percentage of people participating in the market.

Dr Olowookere said that SEC is working on a 10 -year master plan (2015-2025) that has a session dedicated to financial literacy. He also mentioned the initiative by SEC which has led to the infusion of capital market studies from Primary 4 to SS3 as one of the efforts to deepen financial literacy.

On financial inclusion, he identified the "e-dividend" as one of the platforms that is helping to encourage investors and deepen their participation.

He believed that Accounts should be consolidated in order to make claims and increase inclusion of new entrants into the market. According to him, more can be done in the commodities sector through financing farmers and providing them with warehouse/ storage and promoting trade.

The forum should help to attract new listing into the capital market to make more people financially included and gain knowledge about financial markets and the influence on economic growth and development.

Chief Chris O. Okunowo, F.IoD, President & Chairman of Council, IoD Nigeria in his remarks said the Traders, Investors and Analysts Conference is an avenue to also sensitize young people in terms of financial inclusion and make them a part of the ecosystem.

The journey of financial inclusion according to Chief Okunowo is targeted at economic viability which requires the attention of various sectors. He opined that the government needs to boost investor confidence by managing conflicts between the investors and the government. 

Okunowo said in a bid to boost financial inclusion there needs to be a significant increase in government investments in infrastructure. He tasked the Central Bank of Nigeria on the need to deepen its efforts,  by ensuring quality financial services and the adoption of the right policies. 

Chief Okunowo said the forum will help to bring deeper insight on strategies and policies affecting businesses and the government, and what could be done to reduce the rate of financially excluded people. 

Delivering the keynote address at the forum delivered by Mr. Habeeb Amole Executive Director, WCM Capital Limited representing  the CEO Mr. Patrick Adebayo Ajayi, said financially excluded people are the vulnerable segments of the society, that need access to financial services and activities. 

He informed stakeholders that financial inclusion focuses more on banking products and services; while other products such as mortgage, pension, insurance, and capital market activities are not given traction. 

The objective of Financial System Strategy (FSS) 2020 according to Mr Amole was to integrate reforms in financial sectors, develop a shared vision that will transform Nigeria to one of the largest economies by 2020. 

He said financial inclusion is set to be achieved when all citizens of a country have easy access to broad financial services.

Speaking on some of the challenges to achieving financial inclusion in Nigeria, he mentioned the following;

  • Low financial literacy level, which  is a huge detriment to the number of people that have engagements with the bank.
  • Inadequate infrastructure
  • Traditional and Religious beliefs
  • Inadequate Research Data and
  • Lack of Saving Culture

 

Citing a report by the Enhancing Financial Innovation Access, EFINA group, Mr Amole said the major barrier to financial inclusion in Nigeria is the lack of products and services. 

Mr. Amole said that on financial exclusion the highest vulnerable groups are women, while the population of the financially excluded people in the country, are majorly in the rural areas. 

He noted that the North East and North West regions had more than half of their population financially excluded. He stated that there was  a great proportion of those in the informal sector that were financially excluded. 

He identified the World Bank building blocks for financial inclusion success, to include;

  • The data and diagnosis that will help policy development
  • The target set to measure progress
  • Internal co-ordination efforts
  • Strategy formulation across government and private sectors
  • Adoption of policies and strategies in real time.

 

He concluded by saying the work of setting agenda to deepen market depth and breadth has been left to regulators only. He advocated that stakeholders should be more involved through continued engagement and advocacy. 

Mr. Sola Ephraim- Oluwanuga in his presentation on Corporate Governance said the onus first lies with government and then the financial operators in expanding financial services across the country.

Mr. Akinyinka Akintunde, the Business Development Manager for AFEX commodities exchange said financial inclusion is a journey for general participation and Nigeria is grossly underserved financially.

According to him Agriculture contributes about 25% to Nigeria's GDP, which means the agro-landscape in Nigeria, needs to be transformed to contribute to national development. "When there is access to finance for farmers, there will be increase in productivity and CPI will in turn reduce" Akinyinka Akintunde said. He called on the private sector players to assist the government in boosting financial inclusion in the rural areas.

Also, Mr. Peter E. Omoregie, CFA in his presentation stated that Nigerians spend 56% of their earnings on food. He therefore harped on the need for growth in the overall economy in terms of GDP to generate overall output.

Mr. Omoregie said the government should pursue pro-growth policies that would unlock the investment opportunity for firms in the country.

He also called on the exchange and all regulators to open the free floats of these businesses and all franchise assets trading on the exchange.



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