The Managing Director of DLM Asset Management, Ugonnaya Osi, has said that collective investment schemes remained underutilized in Nigeria because many Nigerians still believe in keeping money in their banks’ savings accounts rather than investing.
According to her, as of December 2024, Nigerian banks held over N140 trillion in savings accounts, while the total value of collective investment schemes stood at just N3.98 trillion.
Speaking during the launch of DLM Money Market Fund, Osi said Nigeria has not scratched the surface in terms of investment, as more Nigerians are still focusing on saving, which yields little or no returns for them.
“There’s this traditional thing that people just save their idle funds in their savings account without necessarily getting an attractive return,” she said.
A cultural preference
The preference for bank savings, according to Osi, is largely cultural and driven by familiarity and liquidity.
She noted that many Nigerians are unaware that short-term investment vehicles like money market funds offer similar flexibility, often with higher daily returns and lower risk compared to fixed deposits.
“A typical money market fund is open-ended, allows redemptions after just 30 days, and offers better returns than what most savings accounts can provide. There’s no 90-day or 180-day lock-in period like with fixed deposits. It’s practically savings with benefits,” she explained.
- The irony, she noted, is that savers are leaving returns on the table while inflation continues to erode the value of their money.
- She emphasized that the DLM Money Market Fund was created to deepen financial inclusion in Nigeria as it targets retail investors.
Funding government projects
Also speaking at the event, the Group Managing Director of DLM Capital Group, Babatunde Obaniyi, said the company has also an approval from the Securities and Exchange Commission (SEC) for its Tax Credit Infrastructure Fund, which is targeted at helping the federal government fund its infrastructure projects.
Referencing major infrastructure needs such as the recently launched 700km Lagos-Calabar Coastal Highway, Obaniyi noted that the government cannot fund such projects alone.
“It will cost around N2.8 trillion. This is where the private sector must step in, and that is why we have come up with this fund. In the process, we are also creating wealth for the people,” he said.
According to him, DLM’s Tax Credit Infrastructure Fund is a N500 billion program riding on the Executive Order 7 framework that allows private companies to invest in public infrastructure in exchange for tax credits.
