Enacy Mapakame Business Reporter
The Financial Securities Exchange Limited (Finsec) says significant progress has been made towards operationalising its Growth Enterprise Market (GEM) portal for Small to Medium Enterprises (SMEs) with a draft framework now in place.
The framework will also guide the disbursement of the $500 million venture capital fund, set aside by the Ministry of Finance and Economic Development to capitalise SMEs who register for on-boarding on the portal.
In an interview with The Herald Business & Finance, Finsec general manager Garikayi Munema said the exchange was targeting the first quarter of this year for implementation and operationalisation of the portal.
Launched last December, the GEM portal is a dedicated online platform designed for SMEs that want to raise capital for retooling operations, increase productivity, or to increase their product range and or to expand into other markets.
It caters for companies that cannot list on the primary exchange like the Zimbabwe Stock Exchange (ZSE) primary bourse.
Following consultations with stakeholders and experts, a month after its launch, the exchange has now come up with a draft framework that will guide implementation of the GEM platform.
The framework will be reviewed by regulator, the Securities Exchange and Commission of Zimbabwe (SECZIM) as well as the Ministry of Finance and Economic Development.
“We must cover much ground in this Q1 from planning to witness actual listings,” said Mr Munema in an interview.
“We have been tasked to come up with a framework that will govern how the funds will be disbursed.
“Our international development partners have offered technical assistance to come up with a framework that meets international standards.
“The first draft is already in place and waiting to be cleared by SECZIM and the Ministry of Finance, once we get these clearances, we can finalise it and move to the next step,” he said.
The $500 million venture capital is one of the funding sources for SMEs, while other development partners will fund projects by youths and women in all sectors of the economy, with the objective to graduate them into big corporations and create employment.
Being the first of its kind in Sub Sahara Africa, successful implementation of the GEM portal will see the concept spreading to other developing markets across the globe to promote SMEs growth and demystify capital markets.
“This concept for online application is the first, it’s an innovation introduced for the first time and the technical partners we are working with are looking at Zimbabwe as a pilot project.
“Once we successfully implement it, they want to take it to the other parts of the world,” said Mr Munema.
Finsec indicated one of its focus areas is to ensure the GEM Portal is transparent for all SMEs that list on the platform.
Added Mr Munema: “The portal is designed in a way that it cannot be manipulated.”
Listing on GEMs enables SMEs to raise substantial capital, while benefiting from improved business profile and liquidity within a regulated environment designed specifically to meet their needs.