By Munachi Chiwendu
The Nigerian Stock Exchange (NSE) has reiterated that it will continue to encourage companies with high growth potentials to seize the opportunity of raising long term capital from its platform
This is even as the exchange said it is ready to work with market stakeholders to ensure access to funding- which remains a challenge is reduced to the barest minimum.
Speaking during a webinar event tagged “Capital Raising for Small Medium Enterprises (SMEs) through the Stock Exchange” in Lagos, the Chief Executive Officer, NSE, Oscar Onyema who was represented by the Divisional Head, Listing Businesses, Olumide Bolumole, said, that access to funding remains a challenge for SMEs while adding that the traditional role of the Exchange as a platform for capital formation and liquidity holds good promise for businesses.
He noted that SMEs contribute a huge part in developing the economy especially in the areas of job creation, poverty alleviation and standard of living of people.
“Despite the impact of COVID-19, the NSE functioned to facilitate needed financing with over N2.5 trillion in capital raised by governments and corporates in 2020 across various asset classes. Furthermore, the Exchange in January 2020 launched the NSE Growth Board designed to support companies in their growth phase and this notably caters to SMEs. As access to capital is a key challenge faced by companies active in various sectors of the economy, the NSE continues to provide alternative funding opportunities to catalyse business growth.” He said.
According to him, Nigeria remains the lowest in terms of growth company representation in the capital as only nine listed companies have a market capitalisation of N6.87 billion as at fourth quarter (Q4) of 2020.
“In 2020, we saw a reduction in revenue across the SME space due to the COVID-19 and so there is a need for them to scale up and they will require medium to long term funding. Our support for SMEs stems from our vision to elevate the Nigerian capital market and cater to various market segments and to ensure all spectrums of businesses/companies in various growth phases can be listed”, he said.
Commending the NSE, President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Hajia Saratu Iya Aliyu, said the significance of SMEs cannot be over emphasized as they employ the largest percentage of labour force globally.
Hajia Saratu noted SMEs face challenges ranging from financial mismanagement, poor record keeping, access to finance and with COVID-19, the challenges have been exacerbated.
She said the NSE growth board represents an opportunity for SMEs to remain afloat in order to support economic progress.
“SMEs are the building blocks of any economy and with the Growth board in place, there is a need for them to raise funds from the stock exchange considering what had happened as regards the COVID-19 pandemic which saw some of these SMEs close down totally”, Hajia Saratu explained.
The NACCIMA boss thereafter assured that it will continue to work with the NSE and market stakeholders to ensure SMEs get access to funds and promote global competitiveness and promote growth in the nation’s economy.
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