The Nigerian Exchange Limited (NGX) has vowed to intensify efforts aimed at attracting young investors to the stock market and addressing perennial issues constituting disincentives to the financial technology (fintech) firms in accessing the market.
Chief Executive Officer of the NGX, Temi Popoola, while welcoming the Africa Walk Delegates to the exchange at the weekend, assured that the NGX has developed a focused strategy that would help to address major constraints such as listing rules and other concerns that have pushed fintech firm to source for offshore capital.
Investigations revealed that Nigerian fintech firms are approaching investors and getting funded, especially from venture capitalists (VC), in countries like the United States, United Kingdom, Switzerland and Belgium.
From the offshore destinations, the fintech firms have raised over $876.5 million in the last six years. From 2014 to 2020, for instance, fintech 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.
Experts argued that these venture capitalists have invested a huge amount of money in emerging financial services startups, thus, making it possible for fintech firms to grow and access more capital offshore.
Popoola disclosed that the exchange is spearheading a transformation drive that would focus on digitising its processes and operations across the value chain to attract this segment of investors to the Nigeria capital market.
“The current investors we have in fixed income and equities are from 50 years and above, we need to ask what needs to happen to capture this young generation.”
We found out that technology is missing. Today, there is a lot of capital within the Nigerian fintech ecosystem and the capital is outside the shores of this country.
“There is a big opportunity for capital formation in Nigeria. The question is, what we need to build to position ourselves and attract this capital that flows outside the country.
According to him, the exchange has created a board that would focus more on how to make the bourse more competitive by looking into the barriers to entry for tech firms which is presently high and causing them to struggle to list on the exchange.
He said the exchange would work with the government and regulatory authorities to open up the entire capital market and make it more appealing to early-stage companies.
Chief Digital Officer, NGX, Femi Oyenuga said whilst the proliferation of digital assets, including Non-Fungible Tokens (NFTs) presents significant challenges to the Nigerian capital market and financial industry, the NGX takes an interest because the proceeds from NFTs can solve climate change issues.
Oyenuga pointed out the market architecture is quite robust, even as the NGX is committed to fostering the growth of sustainable financial products, which integrate the financial risks and opportunities associated with climate change and other environmental challenges.
He advocated active collaborations of the fintech companies, especially in sustainable energy financing to boost capital formation.
Chairman of Platform Capital, Dr. Akintoye Akindele while expressing optimism about the development and growth of entrepreneurs in Africa, noted that the continent has been at the mercy of other people’s perspectives in terms of investment decisions. He said: “The Africa we want will only happen when we collaborate and partner across borders.”