FINANCIAL analysts have urged the Central Bank of Nigeria (CBN) to leverage technology and Bank Verification Numbers (BVNs) to address delays in verifying banks’ capital raise offers, ensuring a more efficient process. This call comes amidst concerns over the slow pace of the verification process, which has hindered the timely conclusion of recapitalisation efforts for the 2024–2026 cycle.
Speaking at the 2024 Capital Market Correspondents Association of Nigeria (CAMCAN) annual workshop, themed “Recapitalisation: Bridging the Gap Between Investors and Issuers in the Nigerian Capital Market,” Mr. Johnson Chukwu, Group CEO of Cowry Asset Management, highlighted the importance of deploying BVN and other technological tools to streamline the verification process.
Chukwu expressed concern over the prolonged delays, noting that some offers remain unresolved nearly four months after their closure. He stressed that faster verification would allow investors to receive their allotments or redirect their funds to other productive ventures, thereby boosting confidence in the capital market.
“Acknowledging the importance of verifying the source of invested capital, the extended timeline for completing the process undermines investor confidence, particularly for those whose funds may be returned due to oversubscription. This delay translates to missed reinvestment opportunities,” he stated.
Chukwu also criticized the current regulatory requirements for corporate investors, including the submission of a three-year audited financial statement, a board resolution, and tax clearance certificates, as potential barriers to investment. He advocated for utilizing existing customer data within the banking system to simplify these processes and reduce the burden on investors.
The analyst described the 2024–2026 recapitalisation exercise as pivotal for strengthening Nigeria’s banking sector and driving economic growth. However, he emphasized that success depends on closing the gap between investors and issuers, ensuring a smooth capital-raising process. He further noted that successful IPOs, rights issues, and private placements would bolster investor confidence and send positive signals to the financial market.
A December 2024 report by Proshare titled “Investors Worried Over CBN’s Slow Capital Raise Verification Exercise” echoed similar sentiments, warning that delays in the process could erode investor trust. The report highlighted the need for balance, urging the CBN to address these concerns while maintaining the integrity of the recapitalisation programme.
As the CBN works to protect the financial system’s stability, analysts have underscored the urgency of adopting efficient verification mechanisms, leveraging technology and BVNs to enhance investor experience and support the broader goals of economic growth and financial sector resilience.
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