Crowdfunding Will Accelerate Financial Inclusion – SEC

The securities and Exchange  Commission (SEC) has said, the operationalisation of Crowdfunding will accelerate the financial inclusion agenda in Nigeria, while increasing the quantum of investible funds by unlocking the untapped capital in the economy.

The executive commissioner of Operations, SEC, Mr. Dayo Obisan stated this at a webinar with the theme ‘Accelerating Financial Inclusion Through Crowdfunding’.

Crowdfunding platforms are websites that enable interaction between fundraisers and the crowd.  It is in line with this that Crowdfunding has garnered a lot of attention from regulators across jurisdictions because of its potentials to further financial inclusion efforts.

Obisan said the event, hosted by the SEC, is first in a series, since the commission’s Rules governing Crowdfunding became effective in January, 2021 with the main objective of ‘Investor safety’ and it is aimed at providing a platform for knowledge and experience sharing among participants.

“It is also to raise awareness of participants, and indeed Nigerians, on Crowdfunding as a funding mechanism for Start-ups and MSMES, to enlighten them on experiences and lessons on Crowdfunding from other jurisdictions as it an alternative way of investment and financing of businesses,” he said.

He described crowdfunding as a new phenomenon growing popularity in Nigeria, adding that, the platform is an innovative source of finance which provides MSMEs, Start-ups the avenue to raise capital from the crowd (populace) by harnessing the power of the internet.

According to him, “in realisation of the potentials of Crowdfunding, the Commission’s Rules issued in January 2021, has taken concrete steps to improve the regulatory framework for Crowdfunding by introduction of the operational framework between the fundraisers and the investing public in Nigeria.

“The framework amongst others makes it mandatory for any investment – based Crowdfunding to be operated only by Crowdfunding Intermediaries through issuance of investment instruments. This will no doubt provide an additional opportunity for MSMES, Start-ups and the general public to quicker fundraising options.

“It is strongly believe that the Capital Market has a leading role to play in this regard by collaborating with relevant stakeholders to map out strategies for deepening the capital market through Financial Inclusion as well as continuous enlightenment programs with focus on Collective Investment Schemes.”

Obisan commended participants on their keen interest on the potential of achieving an all-inclusive capital market towards advancement and the growth of the Nigerian economy.In her remarks, president, African Crowd Funding Association, Mrs. Elizabeth Howard, described crowdfunding as an umbrella term that explains the use of small amounts of money, obtained from a large number of individuals or organisations to fund a project, a business or personal loan and other needs through an online web based platforms.

The chief operating officer, National Association of Securities Dealers, Mr. Eguarekhide Longe stated that crowdfunding  could aid capital mobilisation for economic growth and development.