The Managing Director of the African technology giant, SystemSpecs, Mr John Obaro, has stated that the deployment of digital innovations, cross-industry collaborations and the right policies would solve the persistent challenge of unclaimed dividends in Nigeria’s capital market.
Speaking on “Solving the Unclaimed Dividend Conundrum: Exploring Digital Innovations”, Obaro made this assertion at the 10th conference, investiture and Annual General Meeting (AGM) of the Institute of Capital Market Registrars (ICMR) held recently in Lagos.
To meet the demands of investors, a large number of whom are young and uninterested in manual processes, Obaro said “the capital market needs to upgrade the speed and quality of its service delivery, deploy technology to activate and deepen remote investing, and facilitate self-service to make the industry more appealing to new entrants”.
Obaro said unclaimed dividend, which was valued at 170billion naira as at August 2021 and has been on the rise, “keeps accumulating partly because Registrars, who are responsible for keeping records of shareholders, cannot locate the rightful owner; the owners or their proxies cannot locate the paying agency; or the beneficiaries are aware but reluctant to activate collection,” he added.
Other factors include change of stakeholder’s address, change of name, unavailable bank account, incomplete and ineligible records, beneficiary’s death, strategic negligence, and fraud investments.
Nonetheless, he commended some of the efforts of the Nigerian capital market to re-invent itself. Obaro said the introduction of the electronic Dividend Payment Mandate System (e-DMMS), is “a major step in the right direction where dividends are paid to the specified bank account of the investor on the payable date.”
“However, new technology such as data analytics, cloud computing, Artificial Intelligence, and distributed ledger technology can be maximised to attract new and young investors, enhance efficiency, improve service delivery, as well as increase collaboration in the capital market ecosystem,” he added.
Obaro added that it was important to eliminate any long and excruciating process that involves manual intervention.
SystemSpecs, one of the oldest, longstanding technology firms in Nigeria and a leading provider of financial and human capital technology solutions and services. Its products include Remita, a payment solution platform, and HumanManager, a human capital management solution.