The first ever Growth Enterprise Market (GEM) portal in the region by Financial Securities Exchange Limited (Finsec,) is now available and ready for small to medium enterprises (SMEs) in need of raising funding via capital markets.
Launched last December, the GEM portal is a dedicated online platform designed for SMEs in need of raising capital for retooling operations, increase productivity, or to increase their product range and or to expand into diversified markets.
Implementation of the GEM portal follows feasibility studies that commenced in January this year with various stakeholders such as their development partners — the United Nations Capital Development Fund (UNCDF).
Despite the delays caused by Covid-19 pandemic, the pilot programme enabled FINSEC to fine tune the platform based on feedback from targeted SMEs and other market participants.
A total of 17 SMEs across various sectors, two fund managers, four nominated advisors, two commercial banks and one mobile money operator registered on the platform during the pilot phase to play various respective roles in facilitating, identification and funding of deserving high growth SMEs.
FINSEC general manager Mr Garikayi Munema told The Herald Finance and Business that the positive outcome from the feasibility study informed the implementation of the platform — an initiative to help enterprises raise capital through a safer and regulated market.
“There are different enterprises that are driving the economy and in need of capital for expansion. But these are not big enough to list on the stock exchange.
“Capital raising options for these companies are limited yet these are the ones driving the economy. So we are trying to come up with a platform suitable for them to raise capital for their expansion, ” he said.
The GEM portal enables enterprises to apply for funding and possible listing online.
The funding and listing pathways available on the GEM market include short, medium and long-term debt, equity finance, restricted offers, pre-initial public offering (IPO) placements, private placements leading to full IPO and listing in some cases.
It utilises alternative data analytics through integrations to financial services providers of the applicants and uses digital algorithms including inbuilt artificial intelligence capabilities to analyse, score and screen applicants for suitability of funding in real-time. On the other hand, the platform admits financiers who can register as qualified investors after demonstrating their investment experience and understanding of the investment risk.
Institutional investors, fund managers, corporates, high net worth individuals, the diaspora, foreign investors and development finance institutions are eligible to participate as qualified investors and can all register online.
In addition, the platform admits nominated advisors online and provides them with a pipeline of applicants that may require advisory services to strengthen their applications.
The FINSEC Growth Enterprise Market comes with a complete suite of support services to complement the GEM Portal technology.
“Some of the support services including Incubation and Accelerator services for applicants showing promise but needing a helping hand to make them suitable for funding and/or listing,” said Mr Munema.
Being the first of its kind in the Sub Saharan Africa region, successful implementation of the GEM Portal will see the concept being marketed to other developing markets across the globe to promote SME growth and demystify capital markets.