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SMEs scramble for Growth Enterprise Market

The Financial Securities Exchange Limited (Finsec) says Small to Medium Enterprises (SMEs) from across the sector are scrambling to register for on-boarding on its Growth Enterprise Market (GEM) portal a month after its launch. The GEM portal is a dedicated online platform designed for SMEs in need of raising capital for retooling operations, increase productivity, or to increase their product range and or to expand into diversified markets. This caters for companies that cannot list on the primary exchange like the Zimbabwe Stock Exchange (ZSE) primary bourse. Finsec general manager Garikayi Munema, said the response from SMEs to the GEM portal was encouraging as SMEs from across sectors had already submitted applications. “The response we have received from the market so far is encouraging. We have received about 30 applications in January alone, and this is before we have even gone full scale in marketing this initiative. We can see there is a lot of interest from the market,” said Mr Munema in an interview. The applications received so far came from SMEs from across all sectors of the economy but mainly renewable energy, manufacturing, agriculture and service sectors. Successful implementation of the GEM portal will be a first in the sub-Saharan Africa region as Zimbabwe intensifies efforts to demystify capital markets to cater for even smaller companies to benefit. Developed markets such as the Stock Exchange of Hong Kong opened the GEM market in 1999 to provide growth opportunities for companies that do not fulfil the requirements of profitability or track record for the main board of the exchange. In Kenya, SMEs have an opportunity to raise capital on the GEMs of the Nairobi Stock Exchange. SMEs across the developing world play a huge role to economic growth and employment. In Zimbabwe, the sector has anchored the economy at a time huge corporates significantly downsized operations and other companies eventually folding. This saw the emergence of a vibrant SME sector, now estimated to be employing about three quarters of the country’s employable population. However, SMEs, not only in Zimbabwe but in developing countries often face limited access to financing due in part to the relatively higher risks associated with investing in them. Listing on GEMs, however, enables SMEs to raise substantial capital, while benefiting from increased profile and liquidity within a regulated environment designed specifically to meet their needs. Mr Munema said various stakeholder awareness projects were lined up to educate the market on this offering that is set to benefit the SME sector grow into large corporations.

  Wed Feb 2020