Unclaimed Funds Borrowing May Discourage Market Participation — Investors

Some stock market investors have urged the Federal Government to reconsider its decision on unclaimed funds borrowing, saying it may discourage market participation, especially among retail investors.

Some of the investors who spoke to the News Agency of Nigeria (NAN) in Abuja on Friday, said the development raised important concerns about investor confidence and property rights.

They were reacting to the N100 billion raised by the Federal Government from dormant bank balances and unclaimed dividends as part of its domestic borrowing programme.

Mrs Bisi Bakare, National Coordinator of the Pragmatic Shareholders’ Association, said the move may pose a potential risk to asset security.

She called for strong transparency, accountability, and clear repayment structures to avoid eroding trust in the system.

Bakare appealed for caution, adding that investors want assurance that their funds were protected and easily accessible.

According to her, this development reinforces the need for better investor education and more efficient dividend claims processes.

“It is positive if managed transparently, with proper legal backing and investor protection, but negative if it weakens confidence or creates fear about fund security.

“Investor confidence is the backbone of any capital market, and policies must always prioritise maintaining that trust.

“Policies around unclaimed funds must be handled with extreme care to preserve investor confidence and market integrity,” she said.

On the extension of the trading window by the Nigerian Exchange Group (NGX), she described it as a positive structural development.

Bakare said it aligned the Nigerian market more closely with global best practices, where longer trading hours improve market accessibility, efficiency, and liquidity.

She said it also provided both local and foreign investors with more flexibility to participate in the market, especially those operating across different time zones.

Mr Moses Igbrude, the National Coordinator of the Independent Shareholders Association of Nigeria, frowned at the borrowing of the unclaimed funds.

Igbrude said the Federal Government was supposed to protect the interests and assets of citizens and not borrow from them.

He described the extension of Exchange trading hours as a welcome development, saying it will give more time to the trading business, especially now that the market is at the trillion-dollar threshold.

“I believe this will impact the market positively, and it means well for the market,” he said.

Prince Ridhwan Hamza, the Secretary-General of the Liberated Shareholders’ Association, discouraged the idea of borrowing.

Hamza said that the fiscal environment consistently created bottlenecks for investors.

He suggested that businesses and policies be formed around local realities and norms.

On the extension of trading hours, he said it was essentially modelled to work with the New York Stock Exchange opening time and the London Stock Exchange hours.

“The impact on the market is to be observed over time, because the market feeds on information.

“I expect them to work more towards attaining T+0 settlement, instead of among many other reforms begging for attention,” he said.

The Unclaimed Funds Trust Fund (UFTF) in Nigeria, established under the Finance Act 2020, is a special, perpetual trust that houses dividends of public companies and bank balances that have remained unclaimed for at least six years.

Managed in conjunction with the Debt Management Office (DMO), Securities and Exchange Commission (SEC), and the Central Bank of Nigeria (CBN), these funds remain the property of shareholders and can be reclaimed.