Determined to eradicate the incidence of unclaimed dividends in the capital market, the Securities and Exchange Commission (SEC) organised a week-long e-dividend enlightenment campaign in Lagos to sensitise community leaders, market women, artisans, traders, workers, students and other category of investors on the need to embrace its recently introduced e-dividend platform.
Welcoming participants to the town hall meeting, the Director-General of SEC, Mounir Gwarzo, said the introduction of e-dividend is one of the several initiatives by the regulator aimed at encouraging better participation in the capital market by retail investors. He said the issue of unclaimed dividend has become a thorny one, which has negatively impacted investor confidence.
“Our approach is to identify what the issues are in the market and address them. If you meet any retail investor, they will tell you that for the last five years, dividend has been paid but that they cannot collect the money,” Gwarzo said. “So, we introduced the e-dividend platform to address the unclaimed dividend challenges.”
According to him, the process of claiming dividend by retail investors has become so cumbersome and expensive such that investors would rather abandon the claims. He said that as of today, the unclaimed dividend figure is in the region of N70-N80 billion, while the e-dividend platform was therefore introduced to help streamline the process of dividend claims and payment and make it seamless and cost effective.
“Most times when companies declare dividends, the warrants are sent to the postal or home addresses of investors, who often times get these warrants late or not at all. Imagine somebody who lives in Iyana Ipaja, for instance, it will probably cost him about N5,000 to claim a N2,000 dividend, when you factor in transportation to and from the post office, to the registrars for revalidation, if he gets his warrant late, and then to the bank to lodge the warrant. This discourages such investors from claiming the dividend,” Gwarzo said.
“The essence of the road shows and town hall meetings is to sensitize investors on the need to embrace the e-dividend platform. The e-dividend platform, we believe, will help restore confidence in and deepen the market through increased local participation.”
The e-dividend sensitisation campaign commenced in Abuja some weeks ago, with Gwarzo promising further campaigns across the geo-political zones of the country.
The SEC had in July 2015, in collaboration with the Nigeria Inter-Bank Settlement System (NIBSS) and the Central Bank of Nigeria [CBN] launched the e-payment platform in the capital market and advised investors to obtain the e-dividend mandate form from their banks and registrars for immediate processing and upload to the e-Dividend Mandate Management System (e-DMMS).
By Blessing Ikeme
