One of the most important lessons that a person can learn is how to manage their money. Many young people go into adulthood with little knowledge about financial management and they end up making mistakes that cost them a lot of regrets in the long run. Educating young people about the importance of financial management and making sound financial decisions will go a long way to prevent them from making costly mistakes. This will also encourage them to be financially prudent when making decisions. Thus, the importance of educating young people on financial literacy can never be overhauled or overemphasized.
Financial literacy is the act of acquiring set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. Financial literacy also involves the skillfulness of financial principles and concepts such as financial planning, budgeting, forecasting, compound interest debt management, profitable savings techniques and also, the importance of understanding the value of money and the principles of wealth management. The lack of financial literacy leads to making poor financial choices that can have negative consequences on the financial well-being of an individual.
On the 3rd of January, 2019, Acting Gov. Sheila Oliver of New Jersey in America signed a law that mandates the state Board of Education include financial literacy instruction in the curriculum for sixth- through eighth-grade students in public schools across New Jersey. This bill was signed at President Barack Obama’s Elementary School in New Jersey City. Although the new law gone into effect in September 2019, New Jersey has actually been ahead of the financial literacy curve for years now. In 2014, the state adopted the program Standard 9, 21st Century Life and Careers, which include guidelines for what students need to know and be able to do in order to be successful in their careers and to achieve financial independence and health. Included are specific financial literacy standards broken out by grade level. However, the 2017 Financial Report Card from Champlain College’s Center for Financial Literacy provides the grades for all states, based on their efforts to produce financially literate high school graduates. Sadly, only five states received an “A” grade for their financial education efforts, namely; Alabama, Virginia, Tennessee, Utah and Missouri. These five states require high school students to take at least a half-year Personal Finance course as a graduation requirement. Only 17 states in total require high school students to take a course in personal finance.
After graduation every step our kids take from college through retirement will be directly influenced by their ability to manage their finances: student loans, credit cards, jobs, mortgages, savings, etc. Once they hit 18 years old, they are required, and able, to make decisions that could affect their entire life, often without the necessary financial knowledge and skills. The point being, understanding finance is a critical skill needed as an adult, yet it is not a mandatory high school course in most states.
The Central Bank of Nigeria made a commitment in 2011 which she referred to as the “MAYA DECLARATION”. The purpose of this declaration is to reduce the number of financially excluded Nigerians from 46.3% in 2010 to 20% by the 2020. To ensure the fulfilment of this obligation, a National Financial Inclusion Strategy was accordingly developed and launched in October 23, 2012. The strategy identified consumer protection and its constituent pillars of Market Conduct, Dispute Resolution & Consumer Education as critical to the attainment of its objectives. Sometime in 2015, The Central Bank of Nigeria said it has commenced discussions with the National Education Resource Centre to introduce financial literacy programs into the education curriculum of secondary schools in Nigeria.
At a recent stakeholders meeting conference that was held in Abuja on the 17th and 18th of January 2019, the Central Bank of Nigeria (CBN) in collaboration with a variety of financial industry stake holders came out with a number of policy positions that will help to educate more Nigerians on Financial Literacy and its importance in the society today. It said once the discussions with NERC are finalized, Financial Literacy will be taught as a subject in all Nigerian secondary schools before the end of this year. The commencement of the financial literacy program will assist in improving the savings culture among secondary schools in Nigeria. An important aspect of this strategy is the implementation of financial literacy programs across various target groups of Nigerian population. On the 19th of July 2019, Central Bank of Nigeria (CBN) said it is in partnership with churches and mosques in the promotion of financial literacy in the country. The bank’s Director, Consumer Protection Department, Mr Kofo SalamAlada made this known in an interview with News Agency of Nigeria (NAN) in Abuja. SalamAlada said the apex Bank had organized outreach programs to educate members of some faiths based organizations with a view to educate them on the program and the need to key into it. CBN decided to use such religious organizations because of the spiritual and religious nature of most Nigerians. However, CBN is ready to work with any organization willing to set up an in house financial literacy program.
The five key points from the conference that was held in Abuja on the 17th and 18th of January at the stakeholders meeting include;
1. With Financial Technology (Fin-tech) becoming an increasingly important part of the business ecosystem , there must be deeper collaboration amongst the various regulatory authorities and private market participants such as deposit money banks (DMBs), Telco, retail stores and payment system banks (or agency banks). The regulators must ensure a seamless set of rules and responsibilities that cover issues related to the services rendered by each retail and wholesale market participant.
2. Consumer education needs to be broadened and deepened. Multilevel platforms need to be adopted for the education of a wide range of consumers of financial services:
- Market men and women
- Students-primary, secondary and tertiary
- Crop Farmers
- Animal Husbandry Farmers
- Sellers of small unit items at the margins of urban economies
3. Consumer dispute processes must be fashioned in manners that guarantee quick, easy and inexpensive resolution of differences between service vendors and customers. This may also require speedy resolution of differences between regulatory agents, meaning there must be clarity over role and responsibilities in cases of dispute.
4. The target of national exclusion must be reduced from 46.3% in 2010 to 20% in 2020. The current exclusion rate in 2018 was about 36.8% according to a recent report by Enhancing Financial Innovation and Access (EFINA).
5. To reach the financially excluded, market infrastructure needs to be enhanced. Poor communication, especially in respect of Telco services in rural communities need to be urgently addressed. Many payment bank agents suffer frustration because of weak network connection and slow data processing time.
The lack of financial literacy can lead to owing large amounts of debt and making poor financial decisions. For example, the advantages or disadvantages of fixed and variable interest rates are concepts that are easier to understand and make informed decisions about if you possess financial literacy skills. Based on research data by the Financial Industry Regulatory Authority, 63% of Americans are financially illiterate. They lack the basic skills to reconcile their bank accounts, pay their bills on time, pay off debt and plan for the future.
The current realities in the Financial Sector show that, it is only when the interest of consumers is given proper attention and protected that public confidence would be restored in promoting a strong and stable economy. Though there exits many educated and literate Nigerians, a high percentage of the population does not have the requisite skills to effectively manage their financial transactions and take advantage of the opportunities presented by the financial products and services to improve their well-being. An important aspect of this strategy is the implementation of financial literacy programs across various target groups of Nigerian population.
Consumers of Financial Services have also been subjected to unethical practices from financial institutions which could be attributed to their low levels of financial literacy arising from their lack of knowledge of their rights and obligations in their relationships with the financial institutions. Financial illiteracy affects all ages and all socioeconomic levels. Financial illiteracy causes many people to become victims of predatory lending, subprime mortgages, fraud and high interest rates, potentially resulting in bad credit, bankruptcy or foreclosure.
However, some signs of lack of financial literacy include;
- Not having a budget, a goal or a plan.
- Excessive spending
- Living on debt.
- Not having emergency savings.
- Borrowing for the wrong reasons.
- Banking on an expected money
- Not investing for the long term.
- Ignoring insurance.
- No retirement plan
- Pressure from social media and friends.
- The main steps to achieving financial literacy include;
- Learning the skills to create a budget
- The ability to track spending
- Learning the techniques to pay off debt
- Effectively planning for retirement.
These steps can also include counseling from a financial expert. Education about the topic involves understanding how money works, creating and achieving financial goals and managing internal and external financial challenges.
Financial literacy helps individuals become self-sufficient so that they can achieve financial stability. Those who understand the subject should be able to answer several questions about purchases, such as whether an item is required, whether it is affordable, and whether it an asset or a liability. This field demonstrates the behaviors and attitudes a person possesses about money that is applied to his daily life. Financial literacy shows how an individual makes financial decisions. This skill can help a person develop a financial road map to identify what he earns, what he spends and what he owes. This topic also affects small business owners, who greatly contribute to economic growth and stability.
How can financial literacy be encouraged in Nigerian?
- There is a need for increased consumer financial literacy to improve the literacy penetration ratio which is still embarrassingly low. An 80% penetration by 2021 is targeted.
- Nigerian youths need to be more actively engaged in financial literacy to create a more active financial industry participation rate for a demography group between 16 and 35 years of age. This represents over 60% of Nigeria’s population of an estimated 198million people
- Women need to be especially targeted since research evidence show that they are more reliable borrowers of funds at the MSME levels
- The different segments of the financial ecosystem; banks, insurance companies, pension fund managers and stockbrokers need to be more intimately related to provide consumers
with a more robust understanding of products and services rendered by each market segment and how they are linked or complementary.
- A process of monitoring and evaluation has been designed to ensure that processes or procedure agreed are actually followed
Children and youths are an important target group for the purpose of the financial literacy program. It should be noted that financial literacy is better learned at a young age instead of in adulthood. This is because a habit imparted in the youth at an impressionable age becomes a way of life. Where the youth grow without financial education, it would be difficult for them to have financial literacy as well as being capable of managing their own financial matters in a way that will impact their well-being when they become adults. When financial literacy is achieved, it will help to boost financial inclusion in any country-Nigeria to be precise.
It should be noted that being financially literate is different from acquiring normal education as some people are educated but financially illiterate.
Written by Chukwuma Aguwa
Real estate sector GDP positive in Q4 2020, but still in the woods
The real estate sector like many other sectors of the economy suffers deeply from a dip in macro economic conditions of the country.
According to the Q4 and full-year 2020 GDP data released by the National Bureau of Statistics (NBS), real estate sector returned to positive growth of 2.81% y/y in Q4 2020 following six consecutive quarters of negative growth since the last positive growth posted in Q1 2019 (0.93% y/y).
The significant recovery in Q4 2020 reflects the full reopening of the economy as many residential and commercial projects began operations fully following the suspension of activities during the national lockdown. Overall, the real estate GDP FY 2020 contracted by 9.22% y/y which was well below our 2020 estimate of a 13.7% contraction.
The real estate sector like many other sectors of the economy suffers deeply from a dip in macro economic conditions of the country. In 2016, when the economy went into recession, the sector declined by 6.86% compared with the growth of 2.11% recorded in 2015.
Subdued activities in the real estate and construction industry had a spillover effect on the cement sector where growth slowed drastically to 5.4% in 2016 from 22.1% in 2015 on the back of weak private sector investments and low government spending.
In 2020, as the pandemic ravaged the economy, the real estate sector was not left behind as the unprecedented crisis elevated vacancy rates in existing commercial properties, reduced average footfalls across retail centres and slowed the completion time of many residential developments and infrastructure projects in the country.
This led to an all-time high of a 21.99% contraction recorded by the real estate sector in Q2 2020. The impact of the restrictive measures put in place during the second quarter was apparent in the financial performance of two key cement players (Dangote Cement and Lafarge) as both top and bottom-line performances were pressured.
Looking ahead, we expect growth in the sector to remain weak due to a plethora of factors from high inflationary figures and devaluation which continue to pressure consumer purchasing power to little access to finance which has continued to undermine the demand for housing. Despite efforts geared towards improving mortgage financing or consumer credit, the rate of mortgage financing to housing development in the country remains very low compared to peers in the emerging market.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
What does my startup portfolio look like? – by Olumide Soyombo
Olumide Soyombo discusses his flair to invest in some of the most prospective startups in Africa.
I have been privileged to invest in some of the most interesting Startups in Nigeria and other parts of Africa.
This journey started in 2014 and my approach has always been to just do my thing behind the scenes and support the companies I invest in strategically. However, following the Paystack exit, folks have been curious to see what other companies I have backed, so I have finally decided to share.
I believe we have a couple of stars in here and the next couple of years should be interesting. Please support these companies wherever you see them so that my family can eat o…
Gbedu is a music discovery and streaming service built to dispense the rich sound of Africa. They have created an experience that gives young, upcoming (up and coming) artists the chance to get discovered and earn per stream of their music content.
The startup is connecting Africans to the most extensive catalog g of free localized content, leveraging the power of playlisting, offline, and radio-integration to create new interactions and vast, unique music experience per user locale.
Gbedu is freely accessible to all users and pays every content owner.
Industries: Digital Entertainment, Music Streaming.
Piggyvest is the leading online savings & investment platform in Nigeria, helping individuals manage their finances effectively.
The platform enables users to save small amounts of money frequently with minimal effort. They automate the process of saving tiny amounts daily, weekly, or monthly; and then allow savers, withdraw for free on only set withdrawal dates, thereby practically making saving and investingpossible for users of their platform.
Industries: Financial Services, Banking, FinTech
Intelligra is the builder of an open platform created for smartphone financing. The company’s platform offers MNO (mobile network operator) integration and lock technology, proprietary credit scoring algorithms, and device lock solution. The platform also offers an in-store seamless onboarding app and integrates device OEM (Original Equipment Manufacturer), financiers, and mobile network operators, enabling consumers to access affordable smartphones.
Industries: Financial Services, Mobile Financing.
TeamApt is a financial technology company focused on developing Digital Banking, Business Solutions, and Payments Infrastructure. They are rethinking the needs of consumers, businesses, and the financial industry.
Industries: Fintech, Financial Services
VERTO is a complete F.X. and payment marketplace built for business. VERTO helps business operate efficiently on the international stage. The company makes it possible to open a free U.K. business banks account in minutes with the ability to hold up to 39 different currency balances. Additionally, VERTO gives its business users the ability to make or receive payments in foreign currencies and trade those currencies at lucrative rates.
VERTO provides liquidity and price discovery tools for international businesses. The marketplace provides easy access to exotic and foreign currencies with seamless international online payment services. Mono
Industries: Finance, FinTech, Marketplace
Mono is an API financial technology software designed to become the go-to financial data infrastructure API platform in Africa. The company’s software provides access to financial statements for historical and real-time transactions, balances, bank statements, credit and spending patterns. The platform also make s it possible to initiate direct debit payments and recurring debit. They are enabling users to get an accessible way to check their financial statements and transactions conveniently.
Mono is bringing access to financial accounts across Africa securely and reliably.
Industries: Big Data, Financial Services
Spleet is a Nigerian-based prop-tech startup that offers its users a subscription-based, living solution. Spleet provides access to Shared/entire living spaces with flexible payment options (Daily, Monthly & Quarterly Subscriptions).
They have built a platform and partner with homeowners who want to earn constant (recurring, monthly, and quarterly subscriptions) revenue and homeowners who wish to earn non-recurring income.
Industries: Real Estate, Property Management, Vacation Rental
8. Migo (Done via a Syndicate)
Migo is a cloud-based platform that allows customers to use loans, make purchases, and withdraw cash without the need for plastic debit/credit cards.
Migo offers a digital Credit-as-a-Service platform to domestic banks, mobile operators, retailers, and payment processors. The platform includes APIs, frameworks, consumer insights tools, and expertise on best practices that enterprise partners can use to build transformative consumer credit services in emerging markets.
Industries: FinTech, Financial Services, Credit
LendMe is an online consumer loans platform. Users can choose a loan amount in Naira(₦) and set a repayment schedule. The loan limit of the user increases if the user successfully repays loans. The app is available for the Android platform.
Industries: FinTech, Financial Services, Credit.
Bitnob simplifies access to the Bitcoin Blockchain Technology for People to create wealth, grow their wealth and even build and provide support for their businesses. It is a cryptocurrency exchange that allows users in the African Region to buy or sell Bitcoins quickly. One key feature of the exchange is that it enables its users to automatically and periodically save in Bitcoins with as little as one dollar.
Industries: FinTech, Financial Services, Cryptocurrency
Lemonade Finance is a startup that makes it easy to send money to Nigeria from Canada within seconds. Their platform, available on Google Play and App Store, offers some of the best exchange rates at any given time. What’s more, transactions on lemonade are free, safe, and secure.
Industries: FinTech, Financial Services.
Brass is a digital bank that provides small and medium businesses with a suite of products and tools to help them grow. Brass provides bank-backed, fully insured current account services to local companies in Nigeria.Brass makes it super easy for every business to get a current account from any device, cut traditional bank fees and help businesses and people save money.
Industries: FinTech, Financial Services.
Trove Finance is a platform that allows you to invest in stock markets around the world for as low as ₦1,000. Troves allows its users to automate their investments by linking a debit card to the Trove App.
Its Investment app aims to make the process of finding and selecting investments — specifically Stocks & Bonds — accessible and approachable for beginners. With Trove, users can find stock from public companies from Nigeria, and the U.S. Users can also easily access various bonds, cryptocurrency assets, and mutual funds.
Industries: FinTech, Financial Services, Cryptocurrency
14. Gradient Boost
The Gradient Boost is an end-to-end platform training, upskilling, and matching data science talent in Africa to companies. This last mile data science upskilling platform enables companies to build a reliable data science, data engineering, and data analytics talent pipeline of the top data talent in Africa.
They take on talent with strong data science fundamentals and upskill them through mentorship from experienced data scientists.
This enables the young talent to gain strong collaborative skills, soft skills and practical experience. Ultimately, these young talents can prove their abilities to companies looking to hire talent.
Industries: Data Science, Training
SEND is a Digital freight Forwarder & Customs Broker for African Businesses. Send ships container and air cargo to Nigeria, managing the entire process — from suppliers in China, U.S. & Europe, to the customs clearance and then delivered to customers.
Send is making it easy for people and businesses to ship across Africa and to the world. Their web app, mobile app, and API are used to request their shipping services. They then pick up, package, and ship items through major couriers/carriers. Send.ng provides simple yet not-so-available value-added features like tracking and transparent pricing.
Industries: Logistics, Supply Chain Management, Freight Service
Initially, Gloo.ng, a pure-play electronic retailing service dedicated to delivering direct to their clients’ doorsteps, Gloo has now pivoted into the e-procurement space as Gloopro.
Gloopro simplifies purchasing for large enterprises with eProcurement and commerce solutions. As a one-stop platform for large enterprises to optimize the purchasing of material and service inputs not included in their core products or service, Gloopro offers its customers valuable supply-chain visibility.
Additionally, they enable large enterprises to standardize and automate their entire procurement lifecycle across multiple locations with stock reorder level parameterization and budgeting caps.
Industries: Retail, E-Procurement
PushCV is the largest pool of pre-screened candidates in Africa. PushCV aims to help tackle the unemployment epidemic by providing a platform on which only the best talents are connected to top employers and recruiters.
Push CV is focused on the features that matter most to an employer and hence, the job seeker. Through continued iteration on complex employment problems, they seek to provide continuous improvements to the service that already makes thousands of people find their dream jobs a lot faster, safer, and more seamless.
Previously verifi.ng, Bento has metamorphosized into more than just a payroll and H.R. platform to help companies in Nigeria manage their employees’ salaries. Today, Bento has expanded beyond pension, healthcare, and taxes to provide a platform for salary earners to manage what they consume and how they consume.
Bento has provided healthcare and salary advance services by partnering with a healthcare provider, Hygeia, and money-lender, Zedvance. Moreover, it aims to do much more, for instance, helping parents pay their children’s tuition monthly and pay rent monthly.
Industries: Financial Services, Employee services
Leadspace is an alternative commercial real estate startup aiming to create shared infrastructure for entrepreneurs and founders of small & medium-size businesses.
They provide co-working spaces for entrepreneurs/founders of small and medium businesses, mid-level corporate executives, Independent freelancers, remote workers, and creative artists.
Powercube builds clean energy systems that can provide homes with more than 16 hours of power a day with subscriptions as low as N7,000 ($20) monthly. User can control each system with a mobile application that allows them to determine how much power they want to use.
Powercube was started to relieve small homes and businesses from using generators while providing the highest degree of certainty on bills due.
Industries: Clean Energy
Accounteer is a cloud accounting platform for small businesses. A business owner can create invoices, track expenses and follow up on their finances with ease. Accounteer integrates with external services like banks, e-invoicing platforms and e-commerce.
Industries: Financial Services, MSME
Blackbet is a product-driven Africa sportsbook operator. The company has ambitions to expand and delight the global gaming community by bringing safe, imaginative and innovative sports play to a new generation by simplifying the platform and delighting new customers play-by-play.
Industries: Gambling & Casinos
Fantastic.ng is a free-to-play gaming platform focused on sports fans (hence the name Fantastic). Their platform offers its users an experience similar to sports betting and rewards without requiring any payment.
The sports gaming platform runs on a freemium model that allows users to play for free or buy ₦100 token to access premium games with higher rewards.
All rewards are paid in a digital currency called Fan Coins (F.C.s). These F.C.s are then used in the Fan Shop to purchase various items, including airtime, food, phones, laptops, and get cash back.
Currently, the gaming platform offers a Football Manager, Predict & Win and Sports Quizzes.
Location: Lagos, Nigeria
Engage is a customer messaging platform that helps businesses grow and improve customer retention. It is messaging based on the end user’s journey, preferences, and actions through your business application.
Engage is able to achieve this by segmenting your customers based on their attributes (e.g., gender, location, plan, age) and their actions (e.g., used up data bandwidth, canceled subscription, scheduled an appointment, submitted feedback), and allowing you directly “message” these segments or create automation.
Industries: Artificial Intelligence, Business Development, Messaging
Koa is an app-based platform that helps its users save and grow their money at the tap of a button, making it easier for them to reach their financial goals, starting out from Kenya.
With Koa, users can save for what truly matters to them. Their application helps users break down their goals and save towards them daily, weekly or monthly. Additionally, users with a Koa grow the account, gain interest on the amount they have saved over a set period.
Industries: Finance, Savings, and Mutual Funds
26. Paystack (Exit)
Paystack is a payment platform that enables businesses in Africa to accept payments by anyone, anywhere in the world, from multiple local and global payment channels, including credit cards, debit cards, money transfers, and mobile money.
Additionally, Paystack provides tools to help its business users retain existing customers and acquire new ones.
Industries: Financial Services and Payments
Article culled from Medium
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