SEC Urges Entertainment Industry to Seek Funding from Capital Market

Eromosele Abiodun

Director General of the Securities and Exchange Commission, Ms. Arunma Oteh, has stated that the funding challenge being faced by the entertainment industry in Nigeria can be resolved with long term capital from the stock market.

Oteh made this known while speaking at the 18th annual conference of the Chartered Institute of Stockbrokers (CIS) with the theme, the Capital Market: “The Key Catalyst to the Development of the Entertainment Industry in Nigeria.”

She said the SEC has been collaborating with the Nigerian entertainment industry to sensitise Nigerians on the importance of savings and investment.

If well-funded, she said, the industry is capable providing lots of jobs and is capable of solving the nation’s unemployment problems.

According to Oteh, “Our plan is to continue to leverage on the industry to teach our children the importance of savings. Since independence Nigeria has had world renowned entertainers. Nigeria is a nation that is grossly misunderstood but the entertainment industry has continued to project a positive image for the country. At the moment, the entertainment industry contributes 4.1 per cent to the nation’s gross domestic products (GDP), this tell you the potential of the industry if it is well funded. However, the industry faces a lot of challenges.”

One of such challenges, she added, is the absence of regulation, which has resulted in a lot of self- regulation in the sector.

Oteh said, regulation is important in any industry, adding that it is where the capital market comes in.

According to Oteh: “In the United States, banks raise money from the bond market for lending to movie production houses; the arrangement is typically asset based lending. JP Morgan, one of the largest investment banks in the world has been raising funds for the film industry in the U.S. since 1920. It has expended a $10 billion credit line to the entertainment industry in 2011. There are currently about 20 banks that are raising funding for lending to Hollywood.”

Speaking earlier, President of the CIS, Albert Okumagba, stated that the purpose of the conference was to see how the entertainment industry can interface with the capital market,  “so that we can bridge the capital formation gap between both segment of the Nigerian economy. We want to ensure that those who have talent in the entertainment industry can access opportunities in the expanded platforms in the capital market.”

Culled from: http://www.thisdaylive.com