The Securities and Exchange Commission (SEC) says deploying crowdfunding will accelerate financial inclusion agenda of the country and boost Micro Small and Medium Enterprises (MSMEs).
This is contained in a statement by the SEC Executive Commissioner, Operations, Mr Dayo Obisan, on Sunday in Abuja.
Obisan claimed that by releasing the economy’s unused capital, crowdsourcing might also boost the amount of investable cash.
He defined crowdfunding platforms as websites that allow donors and fundraisers to communicate with one another.
He claimed crowdfunding had attracted considerable interest from regulators in several jurisdictions because of its potential to advance efforts to increase financial inclusion.
According to him, the commission’s regulations governing crowdfunding went into force in January 2021 with “investor safety” as the primary goal.
The executive commissioner referred to crowdfunding as a recent phenomena that is becoming more and more popular in the nation.
He pointed out that the platform was a cutting-edge source of funding that gave MSMEs start-ups.
“This is to raise awareness for Nigerians on crowdfunding as a funding mechanism for start-ups and MSMES, to enlighten them on experiences and lessons on crowdfunding from other jurisdictions.
“This is to also let the people know that it is an alternative way of investment and financing of businesses.
“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 market through financial inclusion,” he said.
Mrs Elizabeth Howard, the President, African Crowd Funding Association, added that crowdfunding was the use of small amounts of money, acquired from a large number of individuals or organisations to fund a project.
Howard noted the small amount obtained from a large number of individuals could also be channeled to fund a business or personal loan and other needs through online web based platforms. (NAN)