eBusiness Weekly
Michael Tome and Chipo Chaumba
FINANCIAL Securities Exchange Limited (FINSEC), on Wednesday launched Pfuma/Inotho, a small to medium enterprises funding and listing platform.
Also known as the Growth Enterprises Market (GEM) Portal, it is a digital listing platform that enables qualifying SMEs to raise capital on the stock exchange, a development that is anticipated to provide “patient capital” for budding businesses.
FINSEC’s concept is divorced from the Zimbabwe Stock Exchange’s whose platform has been predominantly dealing with blue chip firms. Firms in requirement of the funding apply for equity listing through the online portal, where nominated advisors assess and verify the application, after which they are electronically availed to participating underwriters or financiers for equity listing or debt funding consideration.
This innovation has potential to be a game changer in propping up startups and SMEs as it enhances their funding mechanism, minimising challenges faced by upcoming enterprises in accessing affordable capital for growth and retooling.
Pfuma Inotho SME Listing Platform, is a joint venture between mobile banks and the Financial Securities Exchange with the support from local and international development partners that include United Nations Capital Development Fund and the development finance institutions that include Food and Agricultural organisation (FAO),DFID and Government of Zimbabwe through the Ministry of Finance and Economic Development and the Ministry for SMEs.
SMEs have lately been aggressively taking over world economies, for instance in Germany small business constitute 99, 6 percent of companies contributing slightly above 55 percent to the country’s Gross Domestic Product (GDP). Back here, Zimbabwe has more than three million SMEs of which 15 percent are formally registered, contributing about 50 percent to the country’s GDP, employing nearly 75 percent of total workforce in the country. While addressing delegates at the launch, Escrow group chief executive officer, Collen Tapfumaneyi, indicated that the initiative was created to fill the gap where small enterprises had no chance on other stock exchange platforms that only had space for thriving large companies.
“Small to medium enterprises have such a significant impact on economies, so we challenged ourselves to help deepen the country’s financial markets by simplifying access to funding,” said Tapfumaneyi.
Securities and Exchange Commission, Zimbabwe (SECZ) chief executive officer Tafadzwa Chinamo, lauded the innovation saying it is a stride towards encouragement of small companies to list their firms in order to secure capital.
“We were worried about how best do we encourage very small companies to come forward and offer themselves to the investing community, so this platform is ingenious and has potential to accomplish objective,” said Chinamo.
The platform has already generated interest from reputable organisations like Old Mutual Investment Group, Zimnat Asset Management, Lloyd Capital Markets, Invesci , TN asset management and CBZ Capital.
