Despite the National Financial Inclusion strategy adopted by the federal government in 2011 to financially include 80 percent of its adult population by the year 2020, not much was achieved.
About 38 million adults remained completely financially excluded at the end of 2020.
Although the Central Bank of Nigeria (CBN), Nigeria disclosed that the country has gained 64 percent financial inclusion in 2022, as the federal government now targets 95 percent in 2024.
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Recently, the executive commissioner of Operations, SEC, Mr. Dayo Obisan, stated that the operationalisation of Crowdfunding in the country will accelerate the financial inclusion agenda in Nigeria, while increasing the quantum of investible funds by unlocking the untapped capital in the economy.
Mr. Obisan disclosed this while speaking at a webinar with the theme ‘Accelerating Financial Inclusion Through Crowdfunding’.
He described crowdfunding as a new phenomenon growing in popularity in Nigeria, adding that the platform is an innovative source of finance which provides MSMEs and Start-ups the avenue to raise capital from the crowd (populace) by harnessing the power of the internet.
Crowdfunding is a means by which businesses raise capital, by pooling together small amounts of money from a large number of people, instead of meeting investors to raise funds. It also enables efficient interaction between fundraisers and the crowd.
The system in Nigeria, has gained a lot of attention from regulators across jurisdictions because of its potential to further financial inclusion efforts.
Mr. Dayo Obisan, while speaking at the event, stated that crowdfunding is a very effective way of funding SMEs which makes it a very ideal alternative of investment and financing of businesses in the country. He therefore urged that much awareness is raised to participants on the system.
In his words;
“It is also to raise awareness of participants, and indeed Nigerians, on Crowdfunding as a funding mechanism for Start-ups and MSMES, to enlighten them on experiences and lessons on Crowdfunding from other jurisdictions as it an alternative way of investment and financing of businesses,”
According to him, “in realisation of the potentials of Crowdfunding, the Commission’s Rules issued in January 2021, has taken concrete steps to improve the regulatory framework for Crowdfunding by introduction of the operational framework between the fundraisers and the investing public in Nigeria.
“The framework amongst others makes it mandatory for any investment – based Crowdfunding to be operated only by Crowdfunding Intermediaries through issuance of investment instruments. This will no doubt provide an additional opportunity for MSMES, Start-ups and the general public to quicker fundraising options.
“It is strongly believed that the Capital Market has a leading role to play in this regard by collaborating with relevant stakeholders to map out strategies for deepening the capital market through Financial Inclusion as well as continuous enlightenment programs with a focus on Collective Investment Schemes.”