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November 18, 2019
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AFE 10th Annual Conference in Cairo, Egypt

Posted: Monday, 29 Apr 2019

Second panel of the AFE 10 th Annual conference discuss status of listing SMEs in the stock market and means of improving it During the second session entitles “Are Exchanges doing it Right for SMEs” moderated by Oscar N. Onyema, CEO of the Nigerian Stock Exchange with the participation of Hannes Takacs, Associate Director, Head of Equity Capital Markets, European Bank for Reconstruction & Development (EBRD), Paul Love, Principal, Market Infrastructure, Oliver Wyman and Rachana Bhusari, Vice President-SME, National Stock Exchange India, speakers discussed means of supporting SMEs and bringing them to the capital market. Oscar Onyema said that the panel will discuss SMEs listings from difference angles most important of which is mechanisms to promote more listings and obstacles facing SMEs listings. He explained that SMEs play an important role in the development of all countries in General. It provides the right environment for growth within the global economic fluctuations we are facing currently. The World Bank indicators noted that 80% of jobs in Africa come from SMEs. Adding that, according to the WFE concerning the issue of offering more features for small businesses, providing approximately $131 million for about only 1% of those projects. He stressed on the importance of creating different mechanisms to provide funding for SMEs. Hannes Takacs added that the Bank operates in 48 country and discovered that lack of funding for SMEs is due to lack of guaranties. The solution is in converting the stock exchanges to be corporate financing tool for them. He added that the EBRD is striving to make this work, and the issue of the stock exchanges have become good places as centers to finance this type of company. Takacs said that it is the role of Government to create and encourage stock exchanges to play this role. “There is interest from SMEs [to list] but they need someone to take them by the hand,” Takacs said. SMEs lack familiarity with capital markets and there’s not enough research available on the companies, making it difficult for investors to get transparency on the market. Regulators are also currently based on a “one size fits all” mentality, which sometimes squeezes out SMEs. Rashana Bhusari indicated that SMEs has a good weight in the Indian economy. She said that the National Stock Exchange of India has approximately 200 listed companies. She stressed the importance of changing the mentality of small businesses and having an easy program facilitating entering and exiting the market. She referred to the high number of companies benefiting from the Indian stock exchange platform to be around 500 companies. Paul Love said that if we look at the region they are making good results, and a lot of small companies come across guiding solutions, the question here is how to empower them to achieve further development? Referring to the challenges faced by the various markets. Governments are making efforts to help small businesses, trying to find solutions to the problems of those companies. There were solutions provided through the value chain worldwide. From this point comes the important role of the stock exchange. For companies that can get funding from sources other than stock market find it funding that is not sustainable.
 
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