Cost of funds is the amount incurred in raising fresh funds from the market. It is expressed as a percentage of gross proceeds of an issue. The Commission’s fees in particular recorded a commendable decline falling from 0.69 percent in 2000 to 0.6 percent in 2004.

About a half trillion naira was raised by government and corporate bodies from the Nigerian Capital Market between 2000 and 2004 as a cost of raising fresh capital declined to an all time low of 5.72 percent in the period.

This development is a reflection of positive results of the efforts of the Securities and Exchange Commission (SEC) at reducing cost of funds in the Capital market to attract more funds seekers.

A study recently concluded by the apex regulator of the Nigerian Capital Market has shown that average cost of funds in the capital market which stood at 14.5 percent in the 1900s has suddenly crashed to 5.72 percent between 2000 and 2004 in apparent fallout to the Commission’s deliberate to reduced cost of funds.

According to the study of the Commission, average percentage of cost of raising funds in the market dropped impressively between 2002 but increased marginally in 2004. Against the relatively high cost of the 1990s, the average cost of fresh funds in the market declined to as low as 4.07 percent in 2000, 5.69 percent in 2001, rose marginally to 5.82 percent in 2002 and declined to 5.59 percent in 2003 and inched to 5.72 percent in 2004.