NGX Urges Financial Literacy to Reduce Unclaimed Dividends in Capital Market

The Nigerian Exchange Limited (NGX) has stressed the significance of financial literacy and awareness in addressing the escalating concern of unclaimed dividends in the nation's capital market. Despite the efforts made by the Securities and Exchange Commission (SEC) to combat this issue, the amount of unclaimed dividends in the Nigerian capital market has risen to an alarming N190 billion.

During a retail investors webinar titled "How to Process Outstanding Dividend," Jude Chiemeka, the Divisional Head, Capital Markets at NGX, highlighted the lack of knowledge among retail investors regarding the accumulation of unclaimed dividends over several years, particularly for those with legacy investments. Chiemeka emphasized that a combination of financial literacy and aggressive awareness campaigns can significantly reduce unclaimed dividends in the market.

The objective of the webinar, which was held in partnership with Futureview Asset Management Limited, was to provide investors, especially in the retail segment, with comprehensive procedures to process their outstanding dividends and retrieve any unclaimed dividends. Chiemeka also expressed NGX's commitment to leveraging technology to streamline intermediaries and enhance retail investors' access to the market.

"To this end, we have established a digital gateway to democratize access to the market, reduce friction, and drive retail participation in the capital market," Chiemeka stated.

Furthermore, Chiemeka assured stakeholders that the SEC would continue working diligently to minimize the occurrence of unclaimed dividends. The Securities and Exchange Commission itself revealed that unclaimed dividends in Nigeria's capital market have reached approximately N190 billion.

During the Capital Market Committee (CMC) briefing, the Director-General of SEC, Lamido Yuguda, addressed the recurring problem of unclaimed dividends in the market. Yuguda mentioned that the SEC is currently facing challenges such as identity management and multiple subscriptions, which contribute to the high number of unclaimed dividends.

"The estimated figure of unclaimed dividends so far in the market stands at N190 billion. The SEC is working with NIBSS to make changes to the electronic dividend portal, which is currently undergoing upgrading and repair," Yuguda explained.

Yuguda emphasized the SEC's commitment to reducing unclaimed dividends and restoring investors' dividends through the upgraded e-dividend portal. He stressed that every individual who has invested in the capital market should be able to receive their dividends as and when due.

Efforts to address the growing issue of unclaimed dividends in the Nigerian capital market require a multifaceted approach. Developing financial literacy among retail investors and conducting effective awareness campaigns can go a long way in reducing unclaimed dividends. Additionally, the adoption of technology and improvement in identity management systems will contribute to streamlining dividend processes and ensuring that investors receive their rightful returns on investment in a timely manner.

As the NGX and SEC collaborate with stakeholders to tackle the problem, it is expected that the measures implemented will help minimize the occurrence of unclaimed dividends and foster a more efficient and investor-friendly capital market.

Source of content: OOO News 2023-09-07 News

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