By Adedapo Adesanya
Wealth management startup, Cowrywise Financial Technology Limited, has secured an asset management licence from the Securities and Exchange Commission (SEC).
The licence, dubbed the Fund/Portfolio Management Licence, gives the company the right to manage funds and investment portfolios on behalf of retail investors.
This means that only companies with such licence can develop and operate any product that pools investor funds.
Prior to this status, Cowrywise struck a partnership with a SEC-regulated entity, Meristem Trustees Limited, since it was not a fund manager, but the apex capital market regulator was not happy with this development.
Speaking on the new authorisation, the Chief Executive Officer of Cowrywise, Mr Razaq Ahmed, explained that the SEC licence not only validates the company’s work, but it will help to improve investor confidence and help it deepen its partnerships with other fund managers.
“We can now decide to even build our own mutual funds, partner with other fund and portfolio managers to digitise their operations and expand their reach to first-time investors,” he said.
Mr Ahmed said the company’s plan is to capture 10 million first time investors by 2025 into regulated investments., and an important step going forward is to digitise the country’s investment infrastructure.
According to the CEO, the company will be launching its public Application Programming Interface which other fintech companies and traditional fund managers can access to either launch their own wealth management products, or digitise their operations.
“We want to help fund managers across the world access our services and open up more investment options to serve our customers in Nigeria better.
“Our investment API simplifies regulatory, compliance and technical hurdles. We’ve been developing this for some time and the SEC licence eliminates the regulatory obstacles to launching such a product,” he said.
Earlier this year, Y Combinator-backed Cowrywise raised $3 million pre-Series A, led by Quona Capital which brought its total funding to $3.5 million since its 2017 launch.
The latest move signifies the SEC’s interest in embracing the rise of fintech companies and giving their services the much needed regulatory backing.
This development is coming a few days after Business Post reported that the commission granted its first digital sub-broker licence to investment fintech startup, Chaka.
Co-founded by Messrs Razaq Ahmed and Edward Popoola in 2017, Cowrywise entered the digital wealth management space with the aim of giving more Nigerians access to a range of investment and savings products.
Dipo Olowookere