Capital Market | |
Capital Market | |
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Monday,
August 03, 2020 / 11:45 AM / Nifemi Taiyese for Proshare WebTV / Header
Image Credit: WebTV
Savings, investments and portfolio diversification are three
key areas millennials need to learn as they try to create wealth.
Mr. Felix Imafidon the CEO of reQuid Technologies said
this while speaking as a guest on WebTV's Market Opening Gong programme which
looked at the topic, "millennial interest and participation in Fintech
investments".
He said that millennials need to understand how the
product they are investing in works, and how news information around such
products will impact the value of their investments.
Imafidon said for the future of Nigeria, refocusing on
the transformation from farming to agric-investments was critical for the
nation, if it is to achieve increased revenue generation and foreign exchange.
Speaking on the agric-investment space, he noted that
from the last couple of years agri-tech has presented opportunities for those
who cannot put their effort into farming to invest their funds into it in a bid
to support the farmers who do not have access to capital (funds) and also
access more recent, optimized input and technology for the farming process.
According to him, the agric tech companies have been
able to successfully create a bridge for the gap present in Nigeria's
agricultural sector, through the building of platforms for individuals to lend
their income (funds) to farmers and get a return on investments, ROI from the
farmers' proceeds at the end of a farming season.
He was of the view that the beauty of agri-tech,
created the enabler for young people who are not interested in farming, to
develop an interest in funding the farmers.
reQuid Technologies is a company that helps to drive
millennial participation in the capital market and by winning the maiden
hackathon organized by the Nigeria Stock Exchange the CEO said it was able to
validate the investment product; the market place where they aggregate all the
different farm funding opportunities for their young investors and also to be
recognized as a fintech startup engaging in work and thereby increasing
participation of millennials.
Very critically, with the advent of crowdfunding in
the past four years, a lot of people have come in to participate in that space.
He noted that while there are credible agro tech
investment institutions, he decried that there are also a lot of institutions
that are structured to defraud people of their hard-earned income, stating that
other institutions that didn't come out to defraud people failed on their
promise to investors because they are either making losses or their business is
not structured enough to deliver on what they promise to do.
With over 1m transactions in H1,2020, Imafidon
observed that a lot of the users on the reQuid platform were mostly millennials
who were participating more in investments.
From his research, he noted that millennials want
messages on investment to be crafted simply.
Before he started investing in the stock market, the
CEO of ReQuid Platform said that information on the stock market was not
millennial-friendly, which led him to go the extra mile of discussing with
stockbrokers and investment experts on learning and understanding the workings
and activities of the stock market.
Recalling his investment journey, Imafidon noted that
his first investments were in the money and capital markets, focusing on simple
products like treasury bills (T-bills).
"We are in an age where the average millennial does
not have the time to do research and understand the dynamics around investing".
He added that "The quest for millennials to have
the investment terms communicated is part of the reasons why they fall prey to
the likes of MMM and other Ponzi schemes who latch on simple communication in
getting their attention".
The Agri-tech CEO advocated for investment education
as to how participation in the capital market, can work for the millennials and
also how existing products in the market space can be re-crafted for them to
understand products better.
He also emphasized the importance of providing a
platform that is seamless for young persons to use in monitoring investments,
from making payments to maturity date; critical to increasing millennial
participation in both the money and capital markets.
Imafidon explained that the higher the risk involved
in an investment, the higher the reward, which in many cases shows that the
higher the risk the more likely the investor may not get any reward at all.
In understanding the risk assessment framework
for investors, he highlighted the following processes;
Imafidon made the case for investors to be properly
educated on the risks involved in any investment option ranging from the stock
market, agri-tech investments, state government bonds and so on.
He advised millennials to invest in markets they find
interesting as it would help them in monitoring their investments.
On the part of the regulators, he called for increased
effort in investor education, connecting with market participants which would
help give investors some comfort.
"Due to the reality of Nigeria being a
high inflation environment, it is important for the millennials to look for
investment vehicles that will give at least the 12.4% inflation rate to retain
funds and income at the value that they were," he said.
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