Nigeria’s financial ecosystem is rapidly evolving with the introduction of increasingly disruptive financial products and services. As the world moves to more sophisticated financial instruments, the need to pay closer attention to the 36.8% of Nigeria’s population that remain financially excluded becomes more poignant. This is particularly important because the impact of financial exclusion traps individuals in a cycle of poverty and constitutes a drag to economic growth and development.
While the problem of financial exclusion has been identified across several discourse, the importance of financial literacy in liberating the financially excluded should be emphasized even more. This is further underscored by the pervasiveness of various myths that exist about investing.
First, investing has been perceived to be the preserve of the wealthy. Fortunately, a plethora of investment products and services have come into the Nigerian market over the years that allow investors of various income classes to invest in the capital market. With as little as $13, an investor can now gain access to the Federal Government of Nigeria (FGN) Savings Bond – a product introduced to the market by the Nigerian Stock Exchange (NSE) in collaboration with the Debt Management Office in 2017.
Second and third in the series of common myths about investment are that it is unduly risky, and that the fundamentals are too complex to understand. This is however not the case. Concerted efforts have been made in recent times by regulators and other capital market stakeholders to promote transparency and easy access to information about investment products. It has been widely accepted that inclusive growth can only occur when more people participate in the financial markets. For this to happen, individuals must not only have the right information on available financial products and services, but also understand the concepts well enough to make informed decisions.
In light of the above, the NSE recently launched the maiden edition of StockTown, a comic book aimed at promoting financial literacy in Nigeria. Available in both print and digital formats, the comic book has been distributed across the six geopolitical zone with a provision for readers to download the book via http://www.nse-stocktown.com.
StockTown makes use of illustrated characters to educate readers of all ages about the importance of savings and investment. In its first issue, readers are introduced to Mora Johnson and her middle-class family who are experiencing financial hardship that pushes Mora to want to learn more about investment and financial independence. The story has been scripted to address personal finance issues that are common to a significant proportion of the population, while simplifying investment terms and process, and highlighting the various investment products that are appropriate for investors with different investment objectives, risk appetites and income levels.
Commenting on the comic book, Oscar N. Onyema, OON, Chief Executive Officer, NSE said, “StockTown is a product of a passionate idea long held by the Exchange to empower individuals across all levels to make good financial decisions and better their lives now and in the future. In a steadily evolving financial landscape, The Exchange continues to find new ways to communicate the ideas of saving and investment using products available on its platform. We hope this comic, which demonstrates the idea of buy and selling securities in simple terms, can crowd-in the financially excluded, millennials and all lovers of comics.”
The launch of StockTown builds on the Exchange’s strong commitment to promoting financial literacy in Nigeria. Annually, the Exchange implements various initiatives targeted at children and youths, aimed at building a financially savvy generation. The Exchange commemorates Global Money Week by hosting a workshop for youths at its offices and conducting outreach programmes in cities where it operates. In 2019, it reached over 60,000 youths during the weeklong programme.
In line with this commitment, The Exchange hosted a series of workshops this year to educate the market and promote the adoption of investment instruments that are beginning to gain popularity. In its Smart Investing Workshop, the NSE hosted millennials to a training on Exchange Traded Funds (ETFs) as a conduit for investing in the equities market in collaboration with Meristem Nigeria. Facilitators at the training delved deep into the workings of ETFs, the benefits it provides to investors, tracking mechanisms and available instruments on the market. Feedback from participants at the event confirmed that the training was both timely and enlightening and had piqued their interest in this asset class.
The Exchange hosts secondary schools, undergraduates and young upwardly mobile professionals to X-Tours, a financial literacy workshop that culminates in an interactive tour of the trading floor which involves meeting with Stockbrokers. Through these channels, NSE is making significant contributions to reducing the level of financial exclusion in Nigeria to 20% in line with its mandate as a member of the National Finance Inclusion Steering Committee led by the Central Bank of Nigeria. The NSE is also a member of the Financial Literacy Technical Committee of the Securities and Exchange Commission (SEC).