Challenges Faced by Individual Investors in the Nigerian Capital Market

Abstract

Capital markets in Africa have been faced with a number of challenges in their bid to efficiently mobilize capital for the funding of their long-term capital projects and the Nigerian capital market is no exception. It has not been able to efficiently and effectively mobilize the funds in the hands of savers and channel same to the companies that need them for their long-term capital investment. The paper attempts to identify the challenges faced by individual investors in the course of their participation in the capital market which may be hindering the flow of funds to the market. Primary data obtained from unstructured questionnaires was analyzed using frequency distribution table and simple percentages. A number of challenges ranging from inefficiencies of capital market operators, lack of information about quoted companies, the capital market crash, paucity of investible funds, low returns on investment, and lack of transparency in the market, among others were identified. It was also clear from the responses that many individual investors are not knowledgeable about the workings of the capital market, and that more education is needed to create awareness of capital market activities. A number of suggestions were proffered for policy makers to mitigate these challenges.

Keywords: Individual investors, Challenges, Nigerian capital market