The African Securities Exchanges Association has said it is seeking to increase the attractiveness of exchanges as capital raising platforms for Small and Medium Enterprises.
The association said it established the SME Facilitation Working Group, comprising various stock exchanges and chaired by the Johannesburg Stock Exchange, to establish the efficacy of financing of SMEs across African capital markets, according to a statement.
It said the working group conducted a survey involving the 28 member-exchanges to determine the fundamental issues experienced by African SMEs in accessing finance, as well as opportunities available for the SMEs to raise capital on exchanges.
According to the statement, access to finance, corporate governance and marketing are the key challenges confronting small businesses, as identified in the survey.
The report showed that access to finance formed 37 per cent, while corporate governance and marketing formed 18 per cent.
Other issues identified were costs of listing; which related to continuing obligations for SMEs; and corporatising of business.
The survey revealed that while 19 exchanges had SME platforms, most of the SMEs were not aware of exchanges as an alternative to raising finance.
The report read in part, “Following the survey results, the working group developed a report on the capital raising opportunities for small businesses on stock exchanges in Africa, which is a consolidation of survey responses of the 15 ASEA member-exchanges that responded.
“The report is set to provide ASEA member countries with valuable insights that may be beneficial in the development of solutions to assist in meeting the capital raising needs of SMEs in Africa.
“It explores the challenges and opportunities that exist for SMEs wanting to list on exchanges. Featuring prominently on the motivating factors for listing is the prospect of raising funds, elevating company profiles and enhancing corporate governance.”