The Securities and Exchange Commission (SEC) has announced plans to embark on an aggressive investor education to particularly mobilise domestic savings into the capital market, seen as quite low at the moment.
Mounir H. Gwarzo, acting director general, SEC, said one of the ways to begin to mobilise local investments especially through education is a critical issue discussed as members of the Chartered Institute of Stockbrokers (CIS) paid a courtesy visit to the commission on Wednesday in Abuja.
The CIS is soliciting SEC’s support for its programmes as part of strategies to lift investor education and is also requesting that the regulator adopt its professional Diploma in Securities and Investment Programme as a minimum certification for SEC core staff.
Gwarzo said that a close collaboration between SEC and CIS had become critical in creating a vibrant capital market where locals are confident and educated enough to invest.
“One of the issues discussed is in terms of investor education because one of the things we want to develop is domestic investments, both from retail and institutional investors.
“And we are going to step up our investor education programmes, we will also collaborate with the trade association and the CIS in order to reach out to the market,” Gwarzo stated.
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“We believe that by the time we do so well with the investor education, the level of investments in the capital market from the domestic side will go up,” he asserted.
The participation of the local investors into the Nigeria capital market is effectively less that 3 million in a country of over 160 million.
Analysts say savings mobilisation platforms are also weak in Nigeria, especially as regards to collective investment schemes, insurance, pensions, and even banking products.
The capital market coverage of insurance sector is not up to two percent of insurable assets, while pension’s coverage is just about 7-8 percent.
Albert Okumagba, president, governing council, CIS, said that the visit and discussions were borne out of the desire to further deepen the relationship with SEC to the mutual benefit of the capital market stakeholders and to actualise the dream of developing a globally recognised market.
“We believe that our savings mobilisation are weak, especially as it regards collective investment schemes, insurance, pensions, and even banking products,” Okumagba stated, wishing that this could change.
He said that the institute wants to train people to help broaden participation of Nigerians in the various aspects of the financial system in order to mobilise savings into the market.
And as part of this, the CIS intends to mobilise a large population of young graduates annually, over 150,000 for the first quarter of the year to launch them into investment world as entrepreneurs and hopes to increase the number to one million before the end of the year.
Okumagba mentioned that CIS professional Diploma in Securities and Investment Programme which was launched in 2012 and designed to open doors of opportunities for individuals who do not possess university degrees is another platform that could be deployed to drive investor education and financial inclusion.
Okumagba said that CIS has also gone into stronger partnership with the Association of Stockbroking Houses of Nigeria as a stronger force to deal with some of these savings mobilisation issues.
“We believe that the future is bright based on the new approach of the regulator and the government,” he said.
Emeka Madubuike, chairman, Association of Stockbroking Houses of Nigeria, said that the country is supposed to have up to 70-80 million local participation in the market but they are effectively less that 3 million so far.
“That is what education will do because the most protected investor is the most educated.”
