Crowdfunding Will Accelerate Financial Inclusion, Says SEC


The Securities and Exchange Commission (SEC) has said that the operationalisation of crowdfunding will accelerate the financial inclusion agenda in Nigeria, in addition to increasing the quantum of investible funds by unlocking the untapped capital in the economy.

Executive Commissioner Operations SEC, Mr Dayo Obisan stated this at a webinar with the theme “Accelerating Financial Inclusion through Crowdfunding.”

Crowdfunding platforms are websites that enable interaction between fundraisers and the crowd. It is in line with this that Crowdfunding has garnered a lot of attention from regulators across jurisdictions because of its potential to further financial inclusion efforts.


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Obisan said the event hosted by the SEC is the first in a series since the Commission’s Rules governing crowdfunding became effective in January 2021 with the main objective of “investor safety” and that it aimed at providing a platform for knowledge and experience sharing among participants.

“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 an alternative way of investment and financing of businesses.

He described crowdfunding as a new phenomenon growing in popularity in Nigeria, adding that the platform is an innovative source of finance that provides MSMEs, and startups the avenue to raise capital from the crowd (populace) by harnessing the power of the internet.

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 the 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 the issuance of investment instruments. This will no doubt provide an additional opportunity for MSMEs, startups, and the general public to have 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 programmes with a focus on Collective Investment Schemes.

“Certainly, this roundtable discussion promises to be exciting. The faculties gathered here are experts in various fields and set to impact knowledge on understanding crowdfunding, its Regulatory Framework in Nigeria, and the potential cf Crowdfunding in accelerating retail participation in the capital market.

“I encourage every participant to take advantage of this educative forum as I have no doubt that this subject will lead to the birth of new ideas that will equip us with the requisite knowledge and skills to achieving financial inclusion through crowdfunding.”

Obisan commended participants on their keen interest in the potential of achieving an all-inclusive capital market for advancement and the growth of the Nigerian economy.

In her remarks, President African Crowd Funding Association, Mrs Elizabeth Howard described crowdfunding as an umbrella term that explains the use of small amounts of money, obtained from a large number of individuals or organisations to fund a project, a business, or personal loan and other needs through online web-based platforms.

Howard stated that crowdfunding investments are like putting money in a wallet.

Also speaking, Chief Operating Officer, National Association of Securities Dealers, Mr Eguarekhide Longe stated that crowdfunding could aid capital mobilisation for economic growth and development.

Longe listed some of the benefits of investing in crowdfunding to include: Company founders can retain ownership since investments are not concentrated as is the case with Venture Capita or Private Equity: Project promoters use the capital raising campaign as a marketing campaign to assess the acceptability of their concepts and Investors can be part owners of an enterprise by investing a minute amount of capital – Risk reduction.

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