Olumuyiwa Olowogboyega
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On Thursday the 8th of April, the Securities and Exchange Commission (SEC) of Nigeria issued a directive on the âproliferation of unregistered online investment and trading platformsâ in the country. The statement said that foreign securities should not be sold to Nigerian investors by these platforms.Â
The new directive comes at a time when investment technology companies like Bamboo, Trove and Chaka have become popular with Nigerian investors. These companies offer the opportunity to buy the shares of publicly-traded companies in the U.S.
One of the reasons their popularity has soared is because of the bull run American tech shares have enjoyed in the last year. Tesla shares, for instance, gained 774% in 2020 alone and Jumiaâs shares jumped from $3 per share in 2020 to $60 per share in February 2021.Â
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The consumer side of Nigerian fintech is full of new activity. Digital lenders offer loans in minutes, cryptocurrency first-movers abound, and startups are helping users invest in reliable financial assets.
In particular, the investment-tech sub-sector has appealed to many who feel uncertain about Nigeria’s economic trajectory. Millennial Nigerians have become serious about structuring and insuring their future wealth against the naira’s volatility.
One way to do this is to trade on stock markets through one of the app-based micro-investing services launched over the last 20 months. We wrote about Rise and Trove some months ago.
Chaka is one such platform. Founded in January 2019 by Tosin Osibodu, with Olaolu Ajose as the chief technology officer, the startup bills itself as an “investment passport” for users.