In December 2019 FINSEC, in partnership with the United Nations Capital Development Fund (UNCDF) unveiled a pioneering online funding platform designed to assist Growth Enterprises including Small and Medium Enterprises (SMEs) in accessing diversified capital raising options through the use of securities market infrastructure. Since the unveiling of this innovation, FINSEC and their development partners under the banner of UNCDF undertook a feasibility study and a pilot program that commenced in January 2020.
The feasibility study and pilot program, despite delays occasioned by the COVID-19 pandemic, resulted in fine tuning of the GEM Portal platform based on feedback from targeted SMEs and other market participants. During the pilot phase, 17 SMEs across various sectors; 2 leading fund managers; 4 nominated advisors; 2 commercial banks and 1 mobile money operator registered on the platform to play various respective roles in facilitating identification and funding of deserving high growth SMEs. The positive outcome of the feasibility and pilot has now paved way for the full implementation of the platform.
The GEM Portal enables enterprises to apply for funding and possible listing online. It utilise 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. The funding and listing pathways available on the GEM market include short; medium and long-term debt; equity finance; restricted offers; pre-IPO placements; private placements leading to full IPO and listing in some cases.
Growth Enterprises and SMEs remain the anchor for sustainable economic growth through employment creation, enhanced capacity utilisation, import substitution, financial inclusion and general improvement of livelihoods for citizens. In both developed and emerging economies, SMEs are the highest contributors to economic activity, growth and development. Through the GEM Portal, FINSEC is availing its infrastructure to coordinate efforts by SMEs, financiers; development partners and policy makers to unearth and polish the country’s hidden GEMS, the SMEs for sustainable economic development.