Nigeria’s large informal sector and a large portion of the populace still remains outside formal investment channels.

Africa’s most populous nation has only 5 million registered investors with Central Securities Clearing Systems (CSCS) accounts, with only 100,000 people actively trading in its stock market.

This challenge was the central focus of the recent United Capital Asset Management Investment Forum, themed “Advancing Financial Inclusion through investments: bridging Nigeria’s knowledge and wealth gap.”

Emomotimi Agama, chairman Securities Exchange Commission, Nigeria (SEC), said Nigeria stands at a pivotal momen in his keynote address titled: Advancing Financial Inclusion through Investments: Bridging Nigeria’s Knowledge and Wealth Gap,” said Nigeria must harness its demographic dividend to boost investment.

“Our theme, Advancing Financial Inclusion through Investments, is not aspirational; it is foundational to national survival.

“ By 2030, Nigeria can either harness its demographic dividend or face deepening inequality,” Agama said.

He said the term inclusion should be reframed as active financial involvement, where access meets empowerment, and capital becomes a tool for transformation.

Agama said that closing the financial inclusion gender gap could lift 700,000 Nigerians from poverty.

He said, “Nigeria has a great population, yet we have a tiny drop of this number of persons involved in the capital market.

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Agama recommended a four-pillar strategy for bridging the gaps.

He listed the four-pillar strategy as democratisation of financial knowledge, catalyse MSME Investment Channels, blended Finance Vehicles: Partner with Bank of Industry (BOI) to de-risk loans for women-led SMEs.

“We need to educate people about finances. As we drive this market, we do so for a purpose. I enjoin everyone to be the disciples and the apostles. Getting this market to move is a deliberate action”, he said.

Odiri Ogini, CEO United Capital Asset Management, said that the informal sector is a sleeping giant- the informal economy contributes nearly 58 percent to Nigeria’s GDP.

“Yet this wealth is largely absent from formal finance. They’re saving, they’re investing, but not through capital market channels that protect and grow wealth over the long term. Essentially. Nigeria’s informal sector is thriving but is excluded from capital markets,” she said.

Nigerians lost N300 billion to Ponzi schemes between 2020-2023, according to the SEC Nigeria, Investor Risk Assessment Study

She said that low financial knowledge comes at a high price for everyone and the economy.

“Financial illiteracy fuels poverty, weakens trust, and holds back our economy. We must democratize investment knowledge,” she said.

About N6 trillion in idle cash sits outside the financial system, largely in informal savings, according to EFinA, 2023 Financial Services Report. Also, only 10 percent of pension contributors actively select investment portfolios, according to the PenCom 2023 Pension report.

Read also: Informal sector seen fuelling Nigeria, Africa’s inclusive growth

Ogini recommended Systematic Investment Plan(SIP), a simple, flexible way for an individual to invest small, fixed amounts regularly (e.g. monthly or weekly, in a mutual fund used in India as a case study for Nigeria.

The concept of an SIP was formally introduced to India in 1993 by the mutual fund industry. As a result, to this day, SIPs are often synonymous with mutual fund investments.

“Over the years, due to investor education and awareness, the adoption of mutual fund investments through SiPs has grown rapidly. SIPs have become one of the most preferred investment avenues for India’s investors,” she said.

India’s total AUM jumped to over 853.4 trillion in 2024 $550billion from 26 trillion in 2010.

Sola Adesakin, a wealth coach, mentioned that the lack of participation from the informal sector is the fear factor.

“ I think fear stems from a lack of proper information. To address fear, we must approach educating people about investment in a very succinct manner,” she said.

Jude Chiemeka, ceo, Nigeria Exchange Limited (NGX) represented Abimbola Babalola, trading and product manager, said that the best way to protect the informal sector from ponzi schemes and bring them into the capital market is to give them regular knowledge on investing.

“This is why we constantly organise webinars. We need to connect this education with our culture, e.g, giving newborn babies investment tools during their naming ceremonies. Also, a lot of the knowledge needs to be backed up by actions,” babalola said.

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