The Malawi Stock Exchange (MSE) says small and medium enterprises (SMEs) are failing to raise capital from the local bourse 18 years after it established an avenue for small businesses.
Launched in 2007, the Enterprise Development and Growth Exchange (EDGEx), previously known as Alternative Capital Market, seeks to provide a platform for SMEs to raise for long-term finance.
around the fortunes. | Nation
Speaking during an SMEs symposium in Blantyre on Wednesday, MSE board chairperson professor James Kamwachale Khomba said 18 years after the platform was launched, there have been no listing.
He said: “Our intent is to ensure we turn around the fortunes of this platform to deliver on its mandate of supporting SMEs growth.
“It is our belief that we cannot have a thriving capital market and indeed a thriving economy if we leave behind the SMEs sector.”
Khomba said as part of raising awareness of EDGEx board, MSE undertook deliberate initiatives to conduct one-on-one business clinics with potential issuers on the EDGEx board.
To list on the EDGEx board, among others, the company must be incorporated and made public, have a minimum subscribed capital of between K250 million and K400 million, have at least 20 percent of the issued capital for which a listing is being offered to the public and have not less than 10 million equity shares in issue.
The MSE also demands that the number of public shareholders of listed securities should at least be 100 for equity shares, 25 for preference shares and 10 for debentures.
A FinScope Survey of 2022 indicated that only 10 percent of medium enterprises, five percent of small enterprises and three percent of microenterprises have access to credit from commercial banks.
Malawi Agriculture and Industrial Investment Corporation (Maiic) chief financial officer Thomson Kumwenda in an interview on Wednesday hailed MSE’s initiative to allow small businesses to tap capital on the capital markets.
“We are supportive of that initiative and we are supportive of SMEs should they need guarantee instruments to cover the gap from what the market can provide,” he said.
Chamber for Small and Medium Enterprises executive secretary James Chiutsi in a separate interview said it is challenging to get finance from the bank due to credit conditions and obsession of government business by banks.
Malawi Financial Inclusion Strategy that runs from 2024 to 2028 seeks to reduce financial exclusion from 12 percent to five percent to achieve sustainable and inclusive growth and support job creation.
The strategy intends to include all players in the country’s economy with financial inclusion as an essential instrument for increasing agriculture and small enterprises production and increasing household income, reducing poverty, increasing resilience and accelerating economic growth.
The 16-counter MSE was established in 1994 with a mandate of providing and operating a platform for raising capital for businesses and secondary trading of listed securities.
