SEC Taps Digital Platforms to Aid Financial Inclusion

Securities and Exchange Commission (SEC) has stated that it recognizes the importance of digital platforms for democratizing access to capital market products and services for greater financial inclusion in the capital market.

This was stated by Lamido Yuguda, director general, SEC, who was represented by Reginald Karawusa, executive commissioner, Legal and Enforcement, at a webinar organised by the Commission, with the theme: “Digital platforms: New Frontier for capital Market inclusion.”

Yuguda said: “As the apex regulator of the Nigerian capital market, with a dual mandate to regulate and develop the market we recognize that the greatest asset of any capital market and indeed any financial market is its investors.

“It is investors, whether retail or institutional, that provide the savings needed for productive investments.

“Inclusion of the excluded population is therefore critical for deepening a sustainable capital market.”

According to him, the Enhancing Financial Innovation and Access 2020 Report on the Nigerian “FinTech Landscape and Impact Assessment Study”, as at December 2018, showed about 40% of Nigerians were still financially excluded, with 51.1 per cent of the excluded population women, while 61.5% are between the ages of 18 and 35.

Also 34 per cent had no formal education and 80.4 per cent resided in rural areas.

This Yuguda said, means that 40 per cent of Nigerians who are financially excluded, especially those between the ages of 18 and 35, are also excluded from participation in the Nigerian capital market.

This low level of involvement in the market has spurred the Commission to intensify its investor education efforts to attract greater participation in the capital market by both existing and potential investors, he said.

The SEC boss asserted that the capital market, as part of the Fintech eco system, is witnessing changes in the conduct of market activities with the emergence of digital platforms which provide wide scale, cost effective and efficient solution for inclusion of potential investors in the capital market especially the younger population.

Yuguda said: “Since 2018, the Commission has been engaging stakeholders within this space to develop an efficient regulatory framework that will mandate responsible digital financial practices to protect investors or consumers.

“The discussions and insight from this webinar, therefore, will be instrumental in shaping the regulatory landscape for the operation of these platforms, as well as support our efforts in securing the mutual benefits from their emergence.”

He restated the Commission’s objectives, which are to build a modern, efficient and low cost market characterised by adequate product offerings, efficient processes and market integrity.

“We must do this continually by raising standards, embracing new technology, introducing new products, enhancing our processes, widening the investor-base, invigorating investor education and providing an enabling regulatory framework to support it all,” he added.

In his remarks, Edward Okolo, director Market Development Department at the SEC, said the topic for discussion is apt based on prevailing circumstances and global realities.

The importance of financial inclusion and digital platforms in such times when human interaction and business operations are limited cannot be overemphasised, Okolo said.

He added that global business thrives on digital products platforms and processes.