By Fredrick Obura
NSE pledges to provide corporate governance training to directors and managers of small-scale and medium sized companies
Small and medium companies seeking capital to fund their expansion plans can now tap investors through the Nairobi Securities Exchange (NSE).
The NSE has officially launched the Growth Enterprise Market Segment (GEMS), which is an alternative platform that would enable small and medium sized firms raise substantial capital at a regulated environment to suit their needs.
The Chairman of the NSE, Eddy Njoroge, said the bourse has nominated advisors who will vet the small and medium enterprises seeking listing in the segment.
The nominated advisors are drawn from Emerging Africa Capital Limited, NIC capital, standard and mutual, CBA Capital, Africa Alliance, Faida Investment Bank and Kingdom securities.
Firms expecting to list must have 100,000 shares in issue, adequate working capital for 12 months after listing, a fully paid-up share capital of Sh10 million, and audited account for one year operations prior to listing.
NSE also said the issue should be listed as a public companies limited by shares and registered under the Companies Act. This means that under GEMS, the company need not to be incorporated in Kenya, but have to be registered locally.
“Access to capital has been a problem to many small and medium enterprises in expanding their business. This has been hampered a sector currently playing a great role in job creation and revenue generation to the economy,” said Eddy Njoroge.
“The establishment of GEMS market will pave way for the listing of small and medium sized enterprises on the exchange, which is a major driver of our country’s economy,” he said.
He said that the GEMS is supported by a wide community of experienced advisors, ranging from brokers to accountants, lawyers and the fundamental nominated advisors who will assist companies to list on GEMS and to comply with good corporate governance and global best practises.
The CEO of the NSE, Peter Mwangi, said the alternative platform would provide an opportunity for the firms participating in the natural resources and mining sectors raise needed capital.
“The establishment of the market will become a fundamental contributor to the stability of the overall financial system of the country. We believe it will provide an opportunity to those in the resource and mining sector to raise capital and also comply with the 35 per cent local equity component,” he said.
“These firms require huge flows of capital to finance their capital intensive operations.”
Following the development, the NSE plans to give train directors on corporate governance to the directors.