The Nigerian Exchange Limited (NGX) has committed to step up efforts to draw in new stock market participants and address long-standing problems that prevent financial technology (fintech) firms from entering the market.
Temi Popoola, Chief Executive Officer of the NGX, stated that the NGX has developed a focused strategy that would help to address significant challenges like listing rules and other concerns that have driven fintech firms to source for offshore capital while welcoming the Africa Walk Delegates to the exchange at the weekend.
According to investigations, Nigerian fintech companies are approaching investors and receiving funding, particularly from venture capitalists (VC) in nations including the US, UK, Switzerland, and Belgium.
About the past six years, fintech companies have raised over $876.5 million from offshore locations. Fintech, for example, raised over $600 million in capital between 2014 and 2020, accounting for 25% ($122 million) of the $491.6 million raised by African digital businesses in 2019 alone, second only to Kenya’s $149 million.
According to experts, these venture capitalists have made sizable investments in startups providing new financial services, enabling fintech companies to expand and access funds from abroad.
In order to draw this group of investors to the Nigerian capital market, Popoola revealed that the exchange is leading a transformation push that would center on digitizing its procedures and operations throughout the value chain.
“The existing fixed income and equity investors we have are over 50; we need to consider what needs to be done to appeal to this younger group.”
We discovered that there is a lack of technology. The Nigerian fintech industry now has a lot of funding, much of it from beyond the borders of this nation.
“Nigeria has significant potential for capital generation. What do we need to build in order to position ourselves and draw in this capital that comes from abroad?
He claims that the exchange has established a board to concentrate more on how to make the market more competitive by investigating the high entry hurdles that now prevent tech companies from successfully listing on the exchange.
In order to open up the entire capital market and make it more enticing to early-stage enterprises, he declared that the exchange will cooperate with the government and regulatory bodies.
While the rise of digital assets, such as Non-Fungible Tokens (NFTs), poses substantial hurdles to the Nigerian capital market and financial industry, Chief Digital Officer of NGX Femi Oyenuga stated the NGX takes an interest since the money from NFTs can address climate change issues.
Even while the NGX is dedicated to encouraging the emergence of sustainable financial products, which include the financial risks and possibilities connected with climate change and other environmental concerns, Oyenuga pointed out that the market architecture is quite resilient.
In order to increase capital formation, he promoted aggressive relationships amongst fintech businesses, particularly in finance for renewable energy.
While being upbeat about the growth and development of African entrepreneurs, Dr. Akintoye Akindele, chairman of Platform Capital, pointed out that the continent has been at the mercy of other people’s ideas when it comes to investment decisions. The African continent we seek would only materialize via cross-border cooperation and partnership, he declared.