Tomie Balogun

‘ Women Need To Take Their Personal Finances More Seriously’

Tomie Balogun is a certified financial educator and a leader within the financial education space in Africa. She holds a Bachelor’s Degree in Economics, a Master of Business Administration ( MBA), and also an alumnus of the Harvard Fintech programme. With over a decade’s worth of experience across management consulting, telecommunications and value- added technology, she contributes her technical expertise and extensive experience to creating fintech products and helping SMES raise funding in Africa. Founder and CEO of Vestract, a digital financial education company that provides financial education to millennials in Africa through the Green Investment club and connects them to vetted investment opportunities, she provides strategic leadership to her digital startup in alignment with the organisational vision of democratising investment opportunities for Africans. She has successfully facilitated crucial investment interventions for businesses across core sectors. Under her leadership, TGIC has grown from 35 members to 1700+ strong community of investors resident across 26 African countries. TGIC has also successfully mobilised $ 17m+ in investment in the capital market and across multiple sectors such as agroprocessing, logistics, real estate development, logistics and consumer lending. Tomie manages the financial literacy goals of the company, successfully training 100,000+ millennials via online courses, free email courses and conducting financial literacy campus tours in six of the biggest universities in Nigeria in pursuance of the overarching goal of sustainable economic impact in Africa. Prior to her current position, she functioned in high impact roles within other sectors of the economy. Tomie who is also an Amazon best selling author, contributes to social development through different volunteer initiatives, including being a volunteer facilitator for the Afara Leadership Development Programme, an initiative that targets female undergraduate females with the objective of bridging currently existing leadership gaps as well as the Microsoft # insiderforgood program for promising startups in Nigeria. In this interview with TOBI AWODIPE, she talks about the importance of financial literacy and inclusion, especially among women, the danger of ponzi schemes, challenges of finding investement opportunities in Nigeria, financial freedom for young people and how investment clubs can lead to economic growth for women.

What inspired TGIC and when did you realise that an investment club was something people needed?

BACK in 2015, I started a blog to share my investment experience; I was on a personal journey to figure out how to invest correctly and I decided to share my experience on my blog. At the time, I had a couple of email subscribers, but I noticed subscriber interest piqued when I shared about starting an investment club with friends.

In 2014, I started an investment club with four friends in a bid to get better with money, contribute money to invest and hold myself accountable on my investment journey. When I blogged about my investment club, I was surprised at the interest, so I held a couple of investment workshops to teach what I had learned about investing, share my experience starting an investment club and also invite experts to share their practical investment experience with those who attended the workshops. The workshops led to requests to start an investment club that was communitybased, that anyone could join without knowing the other members. I thought it was a great idea, as we did not want more members in our private investment club at the time.

I created a framework for a communitybased club and shared the idea with my email subscribers to see who was interested. When 35 people signed up and paid to join the Green

Investment Club ( TGIC), I knew it was something people needed. As a community, TGIC has continued to evolve in approach and offerings. We focus on financial education and connect the members of our community to credible investment options from the SEC- registered companies we work with. From 35 members in 2017, we currently have 1900+ members resident across 38 countries. We are very particular about the members who join us and require a referral code from an existing member or an application from new members. This is to ensure those who join, join for the right reasons, which include learning how to invest correctly and take

‘ When A Business Entity Promises Returns With No Basis, It Should Be Seen As A Red Flag’

action on achieving their financial goals.

There are so many investment companies and firms today promising fantastic returns and the likes, how best can this be regulated to ensure people are making the right decisions?

Financial literacy is very important to ensure people learn how to tell the difference between a good investment opportunity and a ponzi scheme. As a community, we do not promise investment returns and neither do our partner companies. That’s because we know there is no credible investment without risk and there are no guaranteed returns. The only institution probably able to guarantee returns is the government of a country on financial instruments issued in the capital market, but even at that, we’ve seen some countries such as Venezuela and Greece default on debt obligations.

One of the reasons we prioritise financial education is to ensure members of the community can take investment decisions themselves. When you invest in a financial instrument or a company, it should be clear how you can get your money paid back with returns. Financial instruments issued in the capital market are typically raised by governments or corporate organisations that demonstrate the ability to pay back debt obligations.

In the stock market, you’re either trading or investing in the shares of a corporate organisation. If you invest directly in a business ( debt or equity), then it should be clear what value that business provides in the marketplace to meet its debt obligation to you as an investor. When a business entity promises returns with no basis ( i. e. no clear product or service they offer in the marketplace), it should be seen as a red flag. In terms of regulation, I’ll recommend a collaborative approach where the regulators work with companies looking to raise funding either by debt or equity to ensure they are actually in business to produce products or provide a service, provide employment and contribute to economic growth.

A lot of these new companies are quite innovative and need funding to grow the impact and scale of their businesses. The regulators can create working committees to have open discussions on how to regulate and provide licenses for these businesses in a way to attract more investors to the country and contributes to economic growth.

From that humble start, how has it been for you seeing the

club grow to almost 2000 members today?

The journey has been remarkable for me as a founder and for the members of our communities as well. I am inspired daily, by the feedback from our members on how joining TGIC changed their lives significantly in terms of getting better with their personal finances, paying off debt and building investment portfolios they never thought was possible. What’s also remarkable is the difference financial education makes.

Our work with the members of the community proves that when young people are financially educated, they make better financial decisions that help them work towards financial independence and contribute to economic growth. It also proves that when a member is financially educated, they will do everything to ensure the members of their immediate family and friends are also educated. I am incredibly proud and grateful for each member and how they have taken the steps required to get themselves educated and build investment portfolios. I’m also grateful for the multiplier effect this has had on their families and friends.

What has been the biggest challenge finding investment opportunities especially in Nigeria?

Nigeria is an emerging country with many investment opportunities across multiple industries. With an estimated population of about 200 million citizens, Nigeria is an investor’s dream location in terms of investing in a company that scales up significantly and offers significant returns. The challenge, however, is the business environment. The business environment is tough and quite volatile. So, yes, there are lots of investment opportunities, but for an investor, the challenge is seeing how entrepreneurs with innovative businesses have to grapple with a tough business environment and keep mitigating risk with respect to infrastructure, policies and talent.

As a result of these risk factors, the investor has to add a risk premium to returns required from a business. This places an additional cost on the business and puts pressure on the business operations. Most businesses need funding to grow, but they also have to grapple with high cost of sourcing these funding. As investors, we want the business to grow, but we also need to consider the risk we take on as businesses.

Finding the balance is what we always aim for in TGIC. We always want to provide funding at a reasonable cost, but we also have to consider the risk premium to investors. This is currently a challenge, but we believe as the economy continues to grow and the regulators create the right policies, it will get better.

What does it take to be a certified financial educator and leader within the financial education space?

It takes a course and certification exam to becoming a certified financial educator. However, the course only provides a basic understanding of how to help people tidy up their personal finances in general terms. There’s a lot more required to teach financial education; you need practical experience to teach personal finance and investing. You really can’t teach investment in theory. I learnt pretty early that what I learnt in theory is quite different from life experience.

For instance, it is easy to teach people to buy the dip when the stock market declines. However, when you need to do it with your money, you’ll realise it takes a lot of courage to invest when stock market index is in the red. You’ll have to consider the opportunity cost of the money you plan to invest; this is what makes the difference with theory and practical life experience. There are so many things you can learn in theory, but when it’s time to take action, you’ll need courage to take action. I believe this is what makes the way we teach investment education different in TGIC.

Personally, I invest my money alongside members of my community and always share my lessons from my experience; our members also share theirs with the community. I have also experienced investing through different life seasons; as a student, as a professional working 9- 5, as an entrepreneur, a single woman and now a married woman with children. Every life season has taught me important personal finance and investment lessons I couldn’t have learnt in a book.