COLLECTIVE INVESTMENT SCHEME AS A TOOL FOR ECONOMIC INCLUSION AND DEVELOPMENT IN NIGERIA

Abstract

There are two major challenges to doing business in Nigeria: lack of capital and managerial expertise. With the large population of Nigeria, and by implication, the size of her market, Collective Investment Scheme (CIS), as regulated under the Investment and Securities Act (ISA) 2007, provides the necessary platform to overcome the two challenges above. Where the two challenges are overcome, the CIS can be a tool for economic inclusion and development in Nigeria. This study, therefore, examines the Collective Investment Scheme (CIS) in Nigeria, a business package aimed at economic inclusion and development. CIS, regulated by the Securities and Exchange Commission, offers three types of schemes with potential benefits for investors and addressing housing deficits. The CIS is a vital tool for economic inclusion and development of Nigeria. Its domicile in the Nigerian Capital Market (NCM) is to ensure its success as the funds are only invested in securities of choice for profits. The regulatory expertise and wide powers of the Securities and Exchange Commission (SEC) in the regulation of CIS are for the success and sustenance of the scheme via systemic scrutiny of the CIS managers and their operations. However, a comparison with Mauritius reveals some shortcomings. The doctrinal research method is adopted in this study. This doctrinal research adopts a comparative analysis to identify areas for improvement. The study finds that while CIS has advantages, it also has demerits. Recommendations are proffered to enhance the Nigerian CIS scheme, including addressing regulatory gaps and improving investor benefits.