Develop products to deepen retail participation in capital markets – FMDQ

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Mr. Bola Onadele

December 12 (THEWILL) – In order to increase the inclusion rate in the Nigerian capital market, stakeholders considered the introduction of “bag” sized technology products that would lead to increased patronage from investors retail in the capital market, especially the younger ones. generation.

FMDQ Managing Director and CEO Mr. Bola Onadele said this at the 2021 Capital Market Correspondents Association of Nigeria (CAMCAN) annual workshop on: “Technology as a Tool for Inclusion financial in Nigeria ”.

Onadele noted that one way to increase retail investors in the market is to develop products specifically for the target demographic.

Onadele, who was represented by FMDQ Group Head, Research, Dr Vincent Nwani, said developing products in the capital market that would attract the unbanked and financially excluded would be the way to increase the level financial inclusion in the country.

Noting that the country was only able to achieve a 15% increase in inclusion rate over five years, he said Nigeria has the potential to do more than Kenya which has reduced its financially excluded population by 60% by three years.

“Currently, 36% of adult Nigerians are not financially included. Statistics in Kenya show that it is less than seven percent the same as in South Africa. Kenya is as rural as Nigeria, so what have we done to learn from them?

“Everyone knows the story of M-pesa and we even have a company like eTranzact which is as powerful as Mpesa, but how to unlock it. In the future, therefore, we must develop platforms and products that take into account the economic and social characteristics of the unbanked or excluded population.

“Where are they, who are they, how do they currently live their lives and what do they like? Even for those of us in the investing world, are we designing products to suit these people? Are we reducing our products to the smallest denomination, the pouch-sized model?

“Nigeria is driven by the informal sector, with 65% of its GDP in the informal sector. In order for us to catch these people, we have to go lower. Kenya, through the M-pesa, which is the non-bank mobile money framework, has been able to bring financial services even to the hinterland with market women on farms having access to payment systems, to savings and investments.

“Here we are talking about the capital market, a small aspect of financial inclusion. Insurance, retirement are also aspects of financial inclusion that we should explore, if we are to develop this market and improve ourselves with technology, meet them where they are.

He further underscored the need to reach out to the financially excluded through technology, saying, “These are the people who need health, so we are moving to health, food or health technologies. ‘Agriculture.

“We have brokerage firms with a minimum account opening of 5 million naira, but we also have those with a minimum balance of zero and this is the bag size model I’m talking about.

“Even the big men in Nigeria want to buy very small things and we have to replicate the sachet size pattern in the capital market. It has worked in everything it’s applied to in this country, so why wouldn’t we adopt it in the capital market, ”said Onadele.

He said market players need to design investment products to align with financial inclusion strategies to get to the hinterland.

Onadele added that the exchange will unveil in the first quarter of next year new products tailored to meet the investment needs of the masses.

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