By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-Nigeria’s foremost Registrar, First Registrars will Thursday launch a new product “First Dividend Plus Prepaid Card” to eliminate the issue of unclaimed dividend that has posed challenges for the Nigerian Capital Market (NCM).

In a letter dated August 01, 2013 with reference number FRN/BDD/YOL/MOA/2013 made available to InvestAdvocate, First Registrars said the First Dividend Plus is a premium prepaid card issued to shareholders into which dividend amount due to them are loaded/credited on the payable date.

According to the Registrar, this is expected to eliminate the problem of unclaimed dividends as shareholders can now claim all their dividends immediately, even without bank accounts.

“It is in line with our commitment to reducing unclaimed dividends,” the company said.

In the first quarter of 2013, a newly inaugurated Board of the Nigeria’s Securities and Exchange Commission (SEC) said unclaimed dividends in the NCM have hit N60 billion mark.

Suleiman Ndanusa, the Chairman of SEC said the commission is going to reduce the quantum of unclaimed dividends in the Nigerian Capital Market. “We are going to reduce the quantum of unclaimed dividends, when I was at SEC from 1999 to 2004, I was an advocate for doing away with unclaimed dividends, because it’s a governance issue” he said.

According to him, as at then the level of unclaimed dividend was about N8.0 billion, “today I’m told its about N60 billion, something is wrong, why is unclaimed dividends growing; because if a Company is declaring profit and not paying dividend; then there is a problem,” Ndanusa said.

Prior to this time, the issue of Unclaimed Dividend Trust Fund was first proposed in year 2006 under the Olusegun Obasanjo’s administration and was opposed by stakeholders in the Capital Market, following this development; the National Assembly had to dump the idea.

As at year 2010, the amount of unclaimed dividends was estimated to be over N20 billion.

In a Journal of Financial Management & amp; Analysis, July 2006 by Ifuero Osad Osamwonyi, Osarobo Churchill Imasuen, It was affirmed that the growth of unclaimed dividends in Nigeria has been phenomenal. As at the end of 1999, the figure had risen to about N2.0 billion.

From N2.09 billion as at third quarter (Q3) of 1999, the figure for unclaimed dividend has risen significantly over the years to about N17.9 billion as at December 2008, SEC was quoted by the paper as saying and that this figure was obtained from the Companies not from their Registrars.

As at present, unclaimed dividend in the NCM may be well over the N60 billion as reported by the board of Nigeria’s SEC in the first quarter of 2013.