Capital market to drive fund raising for technology companies ––Regulators
By Kayode Tokede
The Securities and Exchange Commission (SEC), Nigerian Exchange (SEC) Ltd. and some Fintech operators have said that technology companies could leverage Nigeria’s capital market platforms to raise funds.
They made the submission at the Virtual TechNovation Conference organised by the NGX with the theme: “Technology, Platforms and Markets,” on Thursday in Lagos.
They urged technology companies to embrace the inherent opportunities in the capital market for fresh capital.
The Director-General of SEC, Dr Lamido Yuguda, in his goodwill message, said that digital and technology-enabled business models had helped the market to restructure in various aspects.
Yuguda said, “The theme of the conference captures the mood of the world today and the inevitable coming together of the three segments especially in view of the COVID-19 pandemic, which has forced us all to strange possibilities and adapt new ways of performing regular and daily activities.
“Digital and technology-enabled business models have helped a market restructuring with financial services provision moving from solid development of banks and other services providers into the domain of non-conventional actors.
“This shift clearly posses a challenge and a huge opportunity to both financial services regulators and conventional financial services providers like the NGX.
“The shift challenges operators to up skill and restructure their business models in order to remain relevant while opening up new product channels and offerings that were not in existence a few years ago,” Yuguda said.
Yuguda also said that regulators globally have had to keep up with the rapid change in technology advancement as this have challenged their regulatory frameworks, tools and approaches.
“Keeping up with the rapid chain of change in technology led market is challenging and the rapid pace of innovation has also challenged existing regulatory frameworks, approaches and tools.
“As FinTech spans most finance and technology sectors, there is additional uncertainty whether and how to regulate.
“However, regulators have responded with their innovations, initiatives to ensure that Fintech strengthens their regulatory objectives and mitigate potential negative impacts.
“The commission like other regulators around the world, is prepared to advance with this evolving pace, it has put mechanisms in place to understand this new innovations and deployed strategies to address them.
“The commission’s innovation objectives, which is hinged on investor protection, market deepening and providing solutions to existing problems will guide market regulation and aid interaction with investors seeking legitimacy and relevance,” he said.
Yuguda commended the NGX for strengthening its competitiveness toward the establishment of the NGX Group and joining the global league of demutualised exchanges.
The Chief Executive Officer, NGX, Mr Temi Popoola, while highlighting the Exchange’s plan around technology, said that the drive was to ensure a multi-asset securities exchange, championing Africa’s sustainable growth and prosperity.
“Specifically, we are keen to democratise finance in Nigeria by leveraging current advancements in technology and relying on strategic partnerships and we will be doing this following our apex regulator, SEC.
“The second is the clear plan to use the exchange as a platform to accelerate innovation in technology and ICT in Nigeria.
“We are committed to making the exchange an avenue for capital formation for technology companies to raise capital and for those who invested to find liquidity for their investments.
“We are convinced that the driver for the next phase of Nigeria’s economic growth is through technology and we are committed as an exchange to help drive that growth by creating wealth for Nigerians,” he said.
Popoola explained that the theme was carefully chosen to reflect the proliferation of products and services driven by technology across many industries in Nigeria.
“The conference signals new horizons that can catalyst growth, expansion and shared prosperity for our market, stakeholders and the larger economy at the national and regional levels.
“NGX is a technology power house that leverages smart digital models to deliver vertical platforms to transform investments, capacity building, market development, among other services.
“The exchange has been a strong consumer of technology and has pioneered many solutions, not just to optimise our internal efficiency but to improve on our delivery to our customers,” he added.
Popoola noted that the Exchange has had no physical trading for over 18 months, as all tradings were done remotely with no recorded downtime in the period, a testament of its digitalisation efforts.
The Chief Executive Officer/Co-Founder, Flutterwave, Mr Gbenga Agboola, while speaking on the future of payment, said that there had been leapfrog in most spectrum of all endeavours owing to digital infrastructural growth.
“I see growth being leapfrogged from every spectrum of our endeavours. COVID-19 has obviously made a big point in ensuring that infrastructure is going digital and everything is at a very interesting rate.
“Funders and regulators are the key stakeholders to drive technology innovations across Africa and Nigeria.
“As a tech company, the vision is to see start-ups, who are not up to 10 years old, listed on the exchange,” he added.
The President, Africa Fintech Network, Dr Segun Aina, said that before March 2020, no boardroom ever took technology and digitalisation seriously.
Aina said: “This conference shows that the NGX is putting digital initiatives to improve the Nigerian capital market and ensure its leadership position in Africa and globally.
“Before the pandemic, there was no sense of urgency in terms of digitalisation, COVID-19 fast tracked and fast forwarded digitalisation across the world, in every industry and sector.
“Before now technology in the market space focused on payment but that has evolved in webtech, capital market technology, among others in the financial space.
“It is a delight that two telecommunications company are among the most quoted on the exchange,” he said.
