Tuesday, May 12, 2020 / 10:00 AM / Bukola Akinyele for
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CEO of Stanbic IBTC Nominees, Mr. Akeem Oyewale, recently spoke on the need for deepening investor education to boost Financial Literacy and investment in Nigeria.
Speaking on investor education and its importance to an economy, the investment manager described investor education as a means of enlightening the population about making informed investment decisions and planning life cycle cash flows to support sustainable and meaningful lives.
For Nigeria with its large population, Oyewale noted that investor education is critical when assessed against the backdrop of current poor investor knowledge. He was of the view that the art and science of converting savings into investments are crucial to the quality of life people live over time. Proper investment planning enables people to achieve permanent streams of income that support their consumption and non-consumption needs.
According to him, financial literacy deepens financial inclusion which would lead to the gradual migration of people from the informal to the formal sector of the economy. Oyewale was of the view that Nigeria has a dominant informal sector and education about financial management needs to start from the primary schools to tertiary institutions, thereby preparing youths for the financial literacy needed for the emerging labour market.
Explaining the difference between investor education and financial Literacy, Oyewale explained that investor education and Financial literacy are similar, while investor education is more purposeful like enlightening people on mutual funds, financial literacy is generic in making people understand the value of money.
The StanbicIBTC Nominee boss explained why Nigerians fall victim to Ponzi schemes. He said, "we don't have a lot of financially literate people and people are anxious about getting rich very quickly which makes them fall into Ponzi schemes, the market has developed to give people a lot of well-regulated options such as money market mutual fund which allows a person to benefit from a relatively higher investment yield than by putting money in a savings account".
Oyewale commended the Chartered Institute of Bankers of Nigeria (CIBN), FMDQ OTC Exchange and the Nigeria Stock Exchange (NSE) for their effort at financial education of Nigerians and improving retail investors access to the capital market.
Speaking on the advent of technology to advance investor education particularly for millennials and an older generation of Nigerians, Oyewale said capital market regulators and operators currently use technology to disseminate financial information across social media platforms in such a way that anybody eager to learn about the capital market can easily gain access to the required information.
According to the CEO of Frontier Africa Report, Mr. Boason Omofaye, there was a need for even the traditional media to serve as a means of communicating financial information in Nigeria as these mediums still form a large part of how several Nigerians receive information and education.
Speaking on the partnership between National and Sub-national authorities on investment in terms of policymaking, decision making and planning, Oyewale said there is a proper handshake between the Capital Market Committee and governments at different levels such as using the initiative of SEC to meet the members of the legislator and for them to understand the importance of the capital market and financial literacy as a whole. He explained that the Committee reaches out and educates the community leaders who in turn extend the education to their communities.
On the part of innovative ways the capital market could build retail investor confidence, Oyewale said the retail market was large, "we make investors understand that investing in the equities market is a long-term play and we educate them on the kind of investment that would be appropriate for their age and risk appetite".
Considering the prospect of retail education beyond 2020, Oyewale was of the view that financial education and financial literacy was important and needed to be embarked upon continuously. He said the Securities and Exchange Commission (SEC) had invested in different jingles to explain the capital market in plain language the average person could understand. He said that local Languages were very important in creating retail market awareness and would go a long way in propelling greater inclusion of smaller-sized investors.