Nigerians have been advised to ensure due diligence before making savings or investment decisions to avoid unnecessary loss of funds.
Some financial experts, speaking separately with the News Agency of Nigeria (NAN) in Ibadan on Tuesday, unanimously called on prospective investors to first familiarise themselves with their investment of choice.
A prior in-depth study of the business activities, they said, would prevent hard-earned money from going down the drain.
A treasury accountant, Mrs Pelumi Ukot, advised would-be investors to follow news trends on their business of interest to know its status before investing.
According to Ukot, the unstable economy has made it necessary to tread carefully before involving in savings or investment.
“Sometimes, the business in view may not be doing well, therefore, anyone investing, especially in these difficult times, must follow up constantly and ask relevant questions.
“This should be either online or in the news. So, they are sure of their earnings on investment or the recovery of their money when they need it,” she said.
Ukot underscored the importance of saving or investing in a truly legitimate way to avoid falling prey to fraudsters.
“I don’t think funds lost to fraudsters can be recovered again, and it’s quite unfortunate that we don’t really have laws in place to enable this kind of recovery,” she said.
A financial consultant, Mr Tunji Adepeju, said, according to history, the informal financial system existed long before the formal financial system.
He said the thrift contribution had existed for many years, though recently operated in different modes.
According to him, some Nigerians now prefer not to keep their money in banks due to some factors in the sector.
Adepeju said failures in the banking sector gave rise to the popularisation of the various savings and investment options people now turn to.
He, however, said that some options, such as the Ponzi schemes, had left many Nigerians with untold devastation.
“To safeguard one’s interest, I will suggest you spread your investments by putting money in different banks and other institutions, instead of putting all your eggs in one basket,” Adepeju said.
He reminded investors that banks have safety measures to guarantee depositors’ or investors’ funds.
“Whenever a bank goes under, it is insured by the National Deposit Insurance Corporation (NDIC) to a certain limit.
“But where you have more than the insurance limit, you will have to wait until the NDIC sells off the bank’s assets and later pays you an appropriate percentage, along with others.
“Now, if you are a petty trader, I would say you put some money in the corporate society and have some with your traditional thrift collector, known as ‘Alajo’.
“You can monitor the thrift collector, and since he has records of your investment, when he dies, all the savings will not die with him.
“You can also put some money through the insurance companies; they have various products you can put money into and get it out when needed.
“We also have, even in the banking sector and some licensed financial operators, what we call, Mutual Funds,” Adepeju said.
According to him, petty traders can also reinvest most of their funds in their stock.
Another financial expert, Mrs Chinyere Babalola, said investors should concern themselves with the character and integrity of the person, group, or company to handle their savings or investments.
Babalola said people of questionable character should be avoided in business to prevent recording losses.
“Running a background check on the person or company you want to keep your funds with matters.
“People don’t really change; whoever you are also comes to play out in handling finances,” Babalola said.
She urged Nigerians to increase and trade with their savings to earn extra income.
“When you have a pool of funds, you can achieve something great.
“When 10 people pool N1 million together, they can buy a landed property in a good area and in the next five years, when they sell it, everyone will get their shares.
“Such things are viable only with people of good character,” Babalola said.