How 70m Unbanked Nigerians Can Raise Capital Market Participation – eTranzact Boss
Photo caption: Temidayo Obisan, SEC Executive Commissioner, Operations, representing DG, Olisa Egbunike, Managing Editor, Global Business Advocate Magazine, Mrs. Chinyere Joel-Nwokeoma, CAMCAN Chairman and Olaniyi Toluwalope, Managing Director/Chief Executive Officer, eTranzact International Plc.
The Managing Director/Chief Executive Officer of eTranzact International Plc, Olaniyi Toluwalope, at the weekend in Lagos urged stakeholders in the nation’s financial services industry to leverage technology and in the process, help close the investment gap in the capital market.
Speaking at the Capital Market Correspondents Association of Nigeria (CAMCAN) 2021 annual workshop with the theme: “Technology as a tool for financial inclusion in Nigeria at the weekend, he challenged stakeholders to resolve the issue of 70m Nigerians without bank accounts but with active mobile lines would advance the financial inclusion and increase more participation.
Toluwalope explained that only 150m of Nigeria’s 200 million population owned mobile phone lines, 110 million of which have no bank verification numbers, meaning they do not have bank accounts, leaving just about 40 million that are financially included.
He called for concerted efforts to close the gap, especially as regards small and medium enterprises.
Toluwalope noted that financial Inclusion holds the answers to three questions that every capital market leader has which include how do we increase the participation of retail investors? How do we encourage more homegrown businesses to leverage the Capital Market for growth? And can the Informal sector participate in the capital markets?
Speaking on: “Technology as a Tool for Financial Inclusion in Nigeria: A Fintech Approach,” he said that over the past few years, technology had allowed more and more people gain access to financial services.
According to him, essentially, the rise of digital financial services means growth for the capital market. In the same vein, by utilising technology to democratise capital market access and participation, we can direct, expand the current digital savings and investment offerings to leverage the capital market for increased returns.
“Today, the average Nigerian can open an account via the APP or by visiting a PocketMoni agent location, send and receive money. We can expand this to include buying shares on the Nigerian Exchange (NGX) or bonds on FMDQ and the likes.
“Billions in investments happen outside the capital markets through unlicensed forex trading, crypto trading, and even sports betting platforms.
“This gives insights into the risk appetite of the average Nigerian. We can leverage technology to capture this value while delivering Financial Inclusion,” he said.
The eTranzact boss said regulators and other stakeholders had explored different initiatives that have been utilised to deliver financial inclusion in the past.
On regulator-led Initiatives, he explained that implementation of a three-Tiered KYC Structure was created to enable financial institutions to expand access to the unbanked while maintaining controls for risk mitigation.
He added that licensing of Mobile Money & Agent Banking Operators led to the rise of digital wallets and digital-first financial services delivered through the wallet-based ecosystems, rather than bank account-based.
He said licensing of Payment Service Banks enables other nonfinancial entities to leverage their distribution network to deliver financial services at the last mile, among others.