Capital Markets and Securities Authority (CMSA)
Capital Markets and Securities Authority (CMSA) is awaiting its first product to list in the Enterprise Growth Market (EGM) while many others have shown interest in submitting applications for issuing shares to the public.
Justifying the need of this new market structure, Capital Markets and Securities Authority’s managing director Nasama Masinda told The Guardian in an interview recently that the introduction of EGM will not only bring a healthy competition into long term financing and provide an alternative source for funding but also enhance dynamism and vibrancy in the equity market.
“By listing in the EGM, small enterprises will have access to capital, expertise and corporate governance which apparently have been among the major hindrances to development of SMEs in the country,” he said.
EGM is an equity market that is specifically intended for small entrepreneurs with startup capital by making loans accessible to small and medium enterprises (SMEs) with high medium and long term interest rates. This is something that commercial banks have not been offering to small and medium enterprises and instead have applied strict lending policies for fear of risk burden.
Massinda explained that the EGM provides an enabling environment for SMEs listed in the EGM to access capital for expansion, expertise in running their business and exposes the enterprises to the codes of corporate governance through Nominated Advisor (Nomads) who are licensed by CMSA to specifically advise issuers under the EGM.
Among other conditions for companies to list in the EGM include formulating a five year business plan and an independent technical feasibility report prepared by Nomads and companies are subjected regulations and continuous disclosure requirements that enhance accountability, sense of responsibility and professionalism in running enterprises.
“Easier access to funding through capital markets is one essential benefit for enterprises to move from informal to formal sector. However, once companies are listed in EGM they face these conditions so as to ensure professionalism from the initial stage”, he said.
CMSA encourages Entrepreneurs to utilise the capital markets for the growth of their enterprises.