Small and medium sized businesses (SME’s) that want to list at Kigali’s bourse will not be subjected to any minimum capital requirement, a move expected to encourage more firms to go public at East Africa’s smallest stock exchange.
Rwanda’s Ministry of Finance and Economic Planning on Tuesday said that the Rwanda Stock Exchange (RSE) will be introducing the new market segment or an alternative investment market for SME’s to ease the challenges such companies face in accessing finance.
The Ministry said that several surveys conducted have concluded that access to finance is the greatest impediment faced by SME’s when they are seeking funds for growth yet they constitute 90 per cent of total businesses in the country and are the biggest employer.
“Unlike the Rwf500 million ($778,048) capital requirements for any company to register on the stock exchange, participants at the SME market segment will simply be required to make disclosures in a prospectus,” said Rwanda’s Ministry of Finance and Economic Planning in a statement.
The new market is targeted at attracting SME’s such as restaurants, cooperatives, distribution businesses, transport companies, hotels to the bourse and this could help the young RSE, which has only two listed firms earn more through listing fees.
Companies that list on the new board will be able to offer corporate bonds and commercial papers to potential investors.
The Capital Markets Authority of Rwanda is currently running a sensitization program to get companies to raise funds and promote the benefits of full disclosure.
Source: Daily Nation