Vice President Yemi Osinbajo has tasked the Nigerian Exchange Limited (NGX) to woo financial technology (Fintech) companies to the nation’s bourse to deepen the capital market,
Osinbajo who stated this at the 2021 Capital Market Conference, held in Abuja yesterday, expressed concern about the inability of Fintech companies and start-ups to access funds from the nation’s capital market, rather they have been raising capital from abroad.
He said the sustainability in Nigeria’s Fintech ecosystem would require existing and emerging financial services startups to have access to the capital market.
According to him, attracting the fintech unicorns to the market as viable option for capital raising would give more investors the opportunity to benefit on the growth of these companies and create wealth for the economy.
He stated that Nigeria needs to develop robust venture capital and private equity funds to support small businesses that have significant growth potentials.
From 2014 to 2020, for instance, Fintechs raised about $600 million in funding, attracting 25 per cent ($122 million) of the $491.6 million raised by African tech startups in 2019 alone, second only to Kenya, which attracted $149 million.
Osinbajo insisted that with the current transformation of the exchange as a demutualised entity, there is a possibility to redefine the market for international competitiveness.
According to him, we must enhance policies and the ability of fintech companies to raise capital faster so that investors can look forward to seeing more faster growing companies listed on the exchange.
Also, the director-general of the Securities and Exchange Commission (SEC), Mr. Lamido Yuguda said technological innovations have been identified as one of the factors that could enhance the efficiency and transparency of Capital Markets around the world and enable financial intermediation, making it easier for investors and market professionals to identify opportunities and conduct their businesses in a timely and cost efficient manner.
He noted that the capital market of every nation plays a strategic role, not only in allocating scarce resources, but in harnessing the huge investment opportunities in agriculture, infrastructure, oil and gas, natural resources as well as in other sectors of the economy.
He added, “Nigeria like most other countries in the world experienced weak growth in their economies as a result of the impact of the COVID-19 pandemic. The Nigerian economy is just recovering from the effect of the pandemic, with a GDP growth rate of 4.03 per cent in the third quarter of 2021.
“To sustain this trajectory, overcome some of the negative impact of the pandemic and achieve the objectives of the developmental plans of the government, the capital market needs to continuously produce innovative products, platforms and processes. Innovation plays a critical role in the development of any capital market as it increases the markets’ chances of reacting to changes, and enables discovery of new opportunities”.
While, the former Governor of Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi said the capital market if well explored could create sustainable funding for fintech companies.
However, he stated that there is need for active involvement of all stakeholders to promote a robust public private partnership arrangement that would attract huge private sector funding and drive the growth of the capital market.
The CEO of NGX, Temi Popoola said the exchange is working out modalities to address major constrains inhibiting the participation of fintech in the market.
He assured stakeholders that the exchange would leverage its robust technology to drive the capital market and create wealth for the wide range of the nation’s population
“We are convinced that the big part of the discourse is around technology. We will leverage technology to create a capital market that is vibrant enough to drive all the challenges we have.”