‘How Nigeria can achieve significant reduction in financial exclusion’

Experts at the just concluded capital market summit of the Association of Stock Broking Houses of Nigeria (ASHON) have stressed the need to create a specialised fund that would address financial literacy at the grassroots and attract more Nigerians into financial system.
 
Besides, they urged government to put structure in place that would allow bank credit to return to the equities market and drive volume and value for increased participation.The experts, who expressed dismay at the current 51 per cent adult exclusion from financial services, noted that much needed to be done to achieve the target of narrowing the level to 20 per cent by 2020.
 
Specifically, the Director General of Debt Management Office, Patience Oniha said financial literacy advocacy level must be increased through the establishment of a fund that would cater for the people at the grassroot. Furthermore, she stated that efforts at improving investors’ confidence in the capital market must be intensified with more focus on the retail shareholders.

“We must address issues around confidence. We need to build confidence around the retail investors. When people are not sure of getting their money back when they invest in these products that are when they would want to patronize the market.“The banking sector has been dominant while other sectors are dormant. There is need to grow other sectors so that some of the savings would go to the capital market to finance investments.“e-Banking and telecommunication; promotion of agency business using telecom to drive the financial sector is imperative. Also simplify processes to make it easy for people to participate. The mutual fund market must be developed; it is a market that suppose to pull a lot of investors,” she said. 
 
The Managing Director of the Central Securities Clearing System (CSCS), Haruna Jalo-Waziri, said the policy makers must put the right structures in place that would stimulate financial inclusion growth in Nigeria.Also, there is need to create the right products that would appeal to the group that is mostly excluded.
 
“We need to think about how do we build products and sell the right products to them. Are the policy makers thinking in the right direction understanding what we need to do, do they have enough knowledge, enough information required in policy making perspective to put the right thing in place and take certain decisions that would to ensure we have the right structures to make the market work for us.
 
“Again, if you walk back to the time we had a very strong market back the day when we had trading done in average of $100 million per day, what was driving market then was bank credit. If you look at the financial statements of banks today, compared to 2006-2007, what you can see is that the pattern of earnings and income is slightly different.
 
“If you compare what we have today in Nigeria and other markets, credit drives stock market whether you like it or not, if you look at products that trade in UK and New York, almost all the instruments traded are credit guaranteed
“We should put structures in place that would allow for the market to have credit. There are risks in giving out credits to capital market. It is done in other markets and how do they do it, you think about how to identify them, once you do that, you put in mitigants and then you price it and decide what you want to do.
 
“We have to start thinking about how to get back credit into the market because when there is value in the market, volume being traded, people will see value in the market and want to participate, you have to create that value by ensuring that there is subscription and credit.”

The Chairman, NASD OTC PLC, Tola Mobolurin, advocated for a review of the entire financial system to create a definite system that would cater for the current need of the people.“There is a need to think about how to distribute financial inclusion products in a most efficient manner. I would rather advocate a financial system review that would Look at the whole financial system and create a system that would serve the need of Nigerians as at today, taking into account of what all the segments of financial system have contribute and to leverage on those resources to lift Nigeria inclusion,” he said.
 
He added that government must ensure that the retail investors participate actively in the savings bond to mobilise resources from the public and boost financial inclusion.