The Nigerian Exchange Limited (NGX) has stepped up its efforts to attract young investors to the stock market and address lingering issues that are discouraging Fintech companies from entering the market.
NGX Managing Director Mr. Temi Popoola said this while welcoming the Africa Walk delegates to the Exchange.
He said NGX has developed a focused strategy that will help address key constraints, such as listing rules and other concerns that have motivated fintech companies to raise capital off shore.
The surveys revealed that Nigerian fintechs are approaching investors and getting funding, especially from venture capitalists (VCs) in countries such as the US, UK, Switzerland and Belgium. From these offshore destinations, these fintechs have raised over $876.5 million over the past six years.
From 2014 to 2020, for example, fintechs raised around $600m in funding, attracting 25% ($122m) of the $491.6m raised by African tech startups in 2019 alone; just behind Kenya, which attracted $149 million.
Experts have argued that these venture capitalists have invested huge sums in emerging financial services startups, allowing fintech companies to grow and access more capital overseas.
Popoola disclosed that the exchange is spearheading a transformation drive that would focus on digitizing its processes and operations across the value chain to attract this segment of investors to the Nigerian capital market.
He noted that “the current investors we have in fixed income and equities are 50+, we have to ask ourselves what needs to happen to capture this younger generation. We discovered that the technology was lacking. Today, there is a lot of capital in the Nigerian fintech ecosystem and the capital is outside the shores of this country.
“There is a great opportunity for capital formation in Nigeria. The question is, what do we need to build to position ourselves and attract this capital that is flowing outside the country.
According to him, the exchange has created a board of directors which would focus more on how to make the exchange more competitive by looking at the barriers to entry for tech companies which are currently high and make them struggle to register. stock Exchange.
Additionally, he said, the exchange would work with government and regulators to open up the entire capital market and make it more attractive to start-ups.
NGX Chief Digital Officer Femi Oyenuga said that while the proliferation of digital assets, including non-fungible tokens (NFTs), presents significant challenges for the Nigerian capital market and financial sector, NGX is interested because the product of NFTs can solve climate change problems.
Oyenuga pointed out that the architecture of the market is quite robust, even though NGX is committed to fostering the growth of sustainable financial products, which incorporate the financial risks and opportunities associated with climate change and other environmental challenges.
He advocated for active collaborations of fintech companies, especially in financing sustainable energy to stimulate capital formation.
Chairman of Platform Capital, Dr. Akintoye Akindele, expressed his optimism for the development and growth of entrepreneurs in Africa, noting that the continent has been at the mercy of others’ views in terms of investment decisions.