Over 10 small-and-medium enterprises (SMEs) and other corporates are looking to list on the Rwanda Stock Exchange’s alternative market segment, officials said yesterday.
Speaking during the RSE Listings Forum 2018 roundtable, Pierre-Celestin Rwabukumba, Rwanda Stock Exchange (RSE) chief executive officer, said the 10 SMEs, drawn from different sectors of the economy, have already signed a memorandum of understanding with RSE, under which the two parties will draw a roadmap to enable them list on local bourse’s alternative market segment to raise investment capital. During the event, RSE launched its second securities platform, Small-and-Medium Enterprise Market Segment. The new platform seeks to give SMEs and corporate companies access to the capital market to raise affordable investment finance to grow their businesses. Officials said the 10 small firms, from the ICT, agribusiness, and manufacturing sectors, were selected during the just-ended of two-month "Access and grow” campaign. Speaking at the roundtable, Rwabukumba said they would facilitate SMEs to obtain the requisite information on the necessary steps and processes needed for them to access funding through the new platform of the capital market.
He said the just-ended campaign indicated huge potential among SMEs across all sectors of the economy. The forum in Kigali was organised by RSE in partnership with the Private Sector Federation and United States Agency for International Development (USAID). While launching the SME market segment, Minister of Finance Amb Clavier Gatete said the sector forms a "very significant component” of the national economy and business landscape, but added that it was still facing a huge challenge accessing funding.
"Therefore, proactive stance by the RSE management to offer a sustainable solution to challenges facing SME sector in terms of availing technical advisory services and access to finance is a welcome gesture. The SME sector forms a very significant component of our economy and business landscape, he said.
"The Government will continue supporting relevant programmes by stakeholders geared toward boosting prospects of the SME sector. Government policy meant to support SMEs is seen through a number of measures, including the recent commitment of $30 million to support the creation of Rwanda Innovation Fund (RIF).”
Supportive policy
Eric Bundugu, the Capital Market Authority acting executive director, said the regulator has eased the process for SMEs to list on the bourse by reviewing its guidelines to attract more players to come to the market.
He added that CMA has also trained over 20 SME operators as part of efforts to build the sector’s capacity, allowing them to operate professionally. Budungu was optimistic that the relaxed guidelines would attract SMEs to the market, noting that access to funding is crucial for sector growth. Malik Haidara, the director for USAID office of economic growth, said the new platform would harness the potential of the SME sector and support efforts geared toward developing Rwanda’s economy, which is "one of the fastest growing in Africa”. Haidara added that "linking the local capital markets with SMEs is a very practical pathway of developing Rwanda’s economy”.
However, Robert Bapfakurera, the Private Sector Federation chairman, said sustainable growth of SMEs was being hindered by inadequate technical and other skills, lack finance, as well as managerial problems.
"SMEs still need support on how to operate professionally to grow and become sustainable. That’s why capacity building is essential, but to achieve this will require collaboration of different stakeholders, including the government,” Bapfakurera said.