Create Products For Millennials, Deepen Retail Market Participation, FMDQ Tasks Operators

Caption: From left, Rotimi Olubi, Managing Director, Morgan Capital Limited; Temidayo Obisan, Executive Commissioner, Operations, representing, the Director-General Securities and Exchange Commission (SEC), Mrs. Chinyere Joel-Nwokeoma, Chairman, Capital Market Correspondents Association of Nigeria (CAMCAN); and Dr. Vincent Nwani, Head, Research, FMDQ Group.

As part of increasing the inclusion rate in the Nigerian capital market, the Managing Director and Chief Executive of FMDQ Group Bola Onadele.Koko, has challenged stakeholders to introduce “sachet” sized technology-driven products that would enhance retail investors’ patronage in the capital market particularly the younger generation.

Speaking at the 2021 annual workshop of the Capital Market Correspondents Association of Nigeria (CAMCAN), Onadele called for product development specifically for the demographic targeted, as a way to attract more retail investors is to develop products.

Represented by Group Head, Research at FMDQ, Dr. Vincent Nwani, he said developing products in the capital market that would appeal to the unbanked and financially excluded would be a way to increase the level of financial inclusion in the country.

Noting that the country has only been able to achieve 15 percent increase in inclusion rate over five years, he said Nigeria has the potential do more than Kenya which reduced its financially excluded populace by 60 per cent in three years.

“Currently, 36 percent of adult Nigerians are not financially included. Statistics in Kenya show that it is less than seven percent the same with 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 companies such as eTranzact that is as powerful as Mpesa but how do we unlock it. So going forward, we need to develop platforms and products that talk to the economic and social characteristics of the unbanked or excluded population.

“Where are they, who are they, how do they currently live their life and what do they like. Even for those of us in the investment world are we designing products to suit these people, are we reducing our products to the lowest denomination, the sachet-sized model.

“Nigeria is driven by the informal sector with 65 percent of GDP is in the informal sector, for us to catch these people, we need to go lower.

Kenya through the M-Pesa which is the non-bank mobile money framework was able to bring financial services even in the hinterlands with market women in the farms having access to payment systems, savings, and investments.

“Here we are talking about capital market, a small aspect of financial inclusion. Insurance, pension are also aspects of financial inclusion that we should be exploring, if we are going to grow this market and improve through technology, meet them where they are,” he added.

He further stressed the need to reach out to the financially excluded through technology saying “these are the people that need health, so we move into health tech, food tech or agric tech.

“We have stockbroking firms with minimum account opening of N5 million but then we also have those with minimum of zero balance and that is the sachet size model I am talking about.

“Even big men in Nigeria want to buy things that are very small and we have to replicate the sachet size model in the capital market. It has worked in everything it is applied to in this country so why don’t we in the capital market adopt it,” Onadele further explained.

Market stakeholders, he continued, needed to design investment products to align with financial inclusion strategies to get to the hinterland, adding that the exchange will in the first quarter of next year unveil new products tailored to meet the investing needs of the masses.