Finance Technology (FinTech) will soon be introduced in Nigeria’s capital market, the Director-General of the Securities and Exchange Commission (SEC), Lamido Yuguda, has said.
He made the announcement on Wednesday when he appeared before the Senate Committee on Capital Market to defend the commission’s 2021 budget proposal.
FinTech, coined from “finance” and “technology”, refers to any business that uses technology to enhance or automate financial services and processes and fix problems in financial infrastructure.
FinTech companies operateby receiving information from customers before helping them make a payment, refund a sale, look up details of a transaction, and set up a billing plan among other things.
Nigeria witnessed the rise of fintech startups in 2020. PREMIUM TIMES reportedhow American fintech giant, PayStripe, acquired a Nigerian counterpart, Paystack, for over $200 million in October, to expand into the African Continent.
“We are implementing the FINTECH road map. We are also contextualising the regulatory independent framework to onboard FINTEX into the capital market.
“We have just released draft rules for the crowdfunding in our regulation. We have received set of comments from the market and very soon we will be releasing these rules to the public,” Mr Yuguda told the panel.
In his remarks, the Chairperson of the committee, Ibikunle Amosun, called for strengthening the country’s Commodity Exchanges to make the market robust and functional.
He called for the introduction of “new products” and consolidation of the existing ones.
He also urged the SEC DG to carry out research on other capital markets across the globe to align with global best practices.
He equally tasked stakeholders in the sector to work towards the domestication of Nigerian products to encourage local investors.
“The Capital Market needs to re-activate our alternate Market, and bring on board unlisted multinational companies, in order to develop a robust Capital Market. These informal sectors as we are all aware is a driving force that will dominate our nation’s economy.
“I encourage all the stakeholders present here to strategise on how to encourage Micro, Small and Medium Enterprises (MSMEs), and multinational companies to participate in the Nigeria Capital Market.
“Let me remind us that, the money market is already dominating the capital market due to reasons such as; system failure, lack of transparency in operations, insider abuse, etc. To this end, the Investments and Securities Act (IST) will be reviewed. We urge all the stakeholders as a matter of urgency to intimate us all areas that require legislation in order to promote the Capital Market”, he said.
On the issue of Unclaimed Dividends, the lawmaker urged SEC and Central Securities Clearing System to “work on it”, for investors’ confidence and growth of the Capital Market.