When people talk about financial inclusion, the focus is usually on the unbanked. Only 64.1% of Nigerian adults are financially included, according to EFInA, a non-profit working to deepen participation in Nigeria’s financial sector. Meaning that almost 30% of Nigerian adults have no access to formal financial services of any kind.
However, there’s another layer to the story; even among the banked, very few Nigerians put their money to work by actively investing. In 2019, barely 2% of the population participated in the Nigerian Stock Exchange. An even smaller number, 0.25%, invest in mutual funds. These are the two most common types of retail investment (retail investment refers to individuals investing their own money, as opposed to institutional investors, which is organisations investing other people’s money on their behalf).
A recent study by the Karlsruhe Institute suggests that retail investors provide stability when the market is in turmoil. They provide liquidity to stocks and lower the risk of price crashes. So, increasing the number of retail investors can make the market more stable overall. For the individual, investing is a path to wealth creation. Deepening participation in formal investing is key to growth for both individuals and the larger economy.
There are many reasons for the low number of Nigerian retail investors. There is a lack of understanding of investment instruments, there is risk aversion (especially given the volatility of the markets in recent years), and there is the problem of access. Most Nigerians consider formal investing beyond their reach.
Several fintech companies have sprung up to address some of these issues, one of them is Halo Financial Services. Halo is on a mission to increase the number of retail investors, providing more Nigerians with the tools and access to start and sustain their journey to wealth creation.
According to co-founder and CEO, Chidimma Onyeokoro, ‘we are really focused on bringing more people into the world of investing. A lot of people think you have to be wealthy to be an investor. We know that people become wealthy by investing. For us, we want to create a path to wealth for more Nigerians. The more people learn about investing and actually participate, the stronger the overall market will be. And that in turn will create opportunities for more investors to make money. Everyone wins.’
Halo offers a range of investment options, some of which start as low as five thousand Naira. Halo provides both Naira and USD-denominated investments. From low-risk mutual funds, for newer or more risk-averse investors; to local and international equities, for investors willing to take more of a risk for a better return; to structured products for more sophisticated investors willing to tie down money for longer periods. No matter your risk appetite or how quickly you need to liquidate your investments, Halo has something for you.
Another problem Halo solves is one of access. Understanding there are different kinds of people within the universe of potential retail investors, Halo works to meet them at their point of comfort. For those who are technologically confident and prefer to do things for themselves, Halo has an app people can use to directly invest in any of their products.
For those in the informal economy, many of whom prefer to transact face to face, can access the full suite of Halo investment products via a nationwide agent network. For wealthy clients, Halo offers portfolio management by expert advisors. They make it easier for anyone, no matter their level of sophistication or income, to invest and build wealth.
Co-founder and Chief Growth Officer, Nnenna Onyewuchi, explains ‘A market woman may have the money to invest in a mutual fund, but not be comfortable enough to do it on her phone. She wants to talk to someone, and have it explained to her. She wants to see the person before she gives her money. Whereas someone who is educated, but working in the office at entry-level, may have the same amount of money to invest as the market woman, but would rather just do it themselves. We want to be able to serve them both. And of course, we don’t want to leave out our HNIs. We want to serve as many people as possible, so we provide that flexibility for people to engage with us how they are most comfortable.’
To make higher ticket investments more accessible to everyday Nigerians, Halo brings a community-driven approach to investing. By allowing groups of people to invest together, Halo lowers the threshold for each individual. For instance, an investment with a minimum subscription of N100,000 may be out of reach for many people; but 5 friends can bring N20,000 each and all will benefit from the returns. By bringing leveraging the power of community, Halo creates avenues for wealth creation that might otherwise be closed to individual members.
Lastly, Halo aims to demystify investing by using plain language, being fully transparent about potential risks and returns, and making the entire process as simple as possible. Halo wants to make investing easy for anyone to understand because they believe everyone should be able to build wealth through investments.
In addition to investments, Halo also offers banking, savings, payments, and lending. Through partnerships, Halo also offers insurance and other financial services. Halo owns two companies; Halo Asset Management, fully licensed by SEC, and Halo MFB (formerly Enrich MFB), fully licensed by CBN. Having to answer to two regulators means Halo must have the highest standards of corporate governance and risk management. Therefore, customers can be fully assured of the safety of their funds.