Small and medium enterprises (SMEs) finding it difficult to access funding will soon heave a sigh of relief as the Nigerian Stock Exchange (NSE) Growth Board(GB) will soon become operational.
Growth Board is meant to cater to the growing needs of start-ups, provide exit opportunities for investors and reduced the cost of funding. It is also intended to act as a vehicle to attract fast growing issuers to list on the NSE, increase overall market capitalisation and order flow in line with the NSE’s strategic objectives.
While rules for listing on the GB have been approved by the Securities and Exchange Commission (SEC), the President of NSE, Otunba Abimbola Ogunbanjo disclosed that they were at the approval stages of the GB.
Sources told THISDAY that the management of NSE has been vigorously working towards getting the final approvals in order to launch the GB in line its new corporate strategic road map from 2018 to 2021.
The exchange has identified the “Elevation of the Capital Market,” as one of its core strategic initiatives for 2018-2021.
And among the plans crafted to achieve this objective, was the support of SMEs growth in Nigeria. According to the NSE, its traditional role as an enabler of capital flow from areas of surplus to deficit, holds good promise for its capability to support this initiative, as access to capital is the prime challenge faced in the SME sector.
However, the NSE explained that whilst this holds a range of benefits for the exchange, potential issuers, investors, and the Nigerian economic ecosystem; current capabilities do not encourage these SMEs to seek public capital.
The NSE said SMEs face some challenges with respect to raising capital on bourse, which include: stringent listing requirements, stringent post-listing requirements and continuing obligations, listing fees, ease of exit for private equity/core investors.
Hence, the decision of the NSE to establish the GB that will recognise and encourage the listing of fast growing companies that are active in their respective sectors, and have exhibited high growth potential.
The Chief Executive Officer of NSE, Mr. Oscar Onyema, last week said in addition to other initiatives already introduced into the market, the launch of the GB would offer an opportunity to help entrepreneurs scale their businesses and access a wider pool of investors.
He said the NSE’s refined vision to be “Africa’s preferred exchange hub,” points to its ambition to be a multifaceted exchange cutting across various markets and geographical regions.
“We aim to be a leading force on customer experience by leveraging emerging technologies to create smart products and services focused on market leadership and enhancement. As the NSE continues to perform strongly in an evolving macroeconomic, regulatory and political environment, the NSE has a responsibility to ensure the orderly functioning of our markets and to contribute to the financial stability of the nation as a whole,” he said.
Onyema, said keying into the 4th industrial revolution, the NSE had digitised some of its primary services leading to the introduction of X-Pay, which highlights its commitment to building a sustainable cashless ecosystem.
“We also launched X-Bot, the first Artificial Intelligence powered chatbot among African securities exchanges designed to provide market participants especially retail investors, convenient and real-time access to data and information from the exchange,” he added.