RBM Encourages SMEs to Register on Stock Markets to Access Finances
The Mzinga Incubation Project is a five-year World Bank-funded project run by the Malawi Stock Exchange (MSE) through Fines to the tune of $86 million.
BLANTYRE, Malawi-The Reserve Bank of Malawi (RBM) has encouraged small and medium enterprises (SMEs) in the country to register on the stock market to access finances to boost their businesses, writes Steven Godfrey Mkweteza.
"The stock market is a cheaper source of capital for SMEs compared to other long-term instruments," said RBM deputy governor William Matambo.
"Over the years, the stock market hasn't been successful, and it has been slightly expensive for SMEs to register for stock markets. However, we have now softened modalities to allow many SMEs to register and access finances through the stock market."
Matambo added that this is also one way of promoting capital and money markets to help SMEs grow their businesses.
"We are trying to open up the SME sector by supporting them with finances," said MSE CEO John Kamanga.
"This is because many SMEs were not registering on the capital markets for fear of losing ownership of their businesses. We are mentoring them for free in good corporate governance, business reporting, and accounting before accessing the finances."
Kamanga said the MSE has also reduced the listing fee by almost 50% for qualified SMEs.
"We have bankable projects that need financial support, but tough policies and economic shocks such as COVID-19 and Cyclone Freddy have also negatively impacted our growth," said IBAM president Mike Mlombwa. "
However, we are hopeful that this project will help us access the finances we need to grow our businesses."
Mlombwa urged the authorities not to politicise the project, saying many tangible projects in the country have failed because of political interference.
"Many tangible projects in the country have failed because of political interference," said Mlombwa.
"We hope that this project will be spared from such interference so that it can achieve its intended purpose."
The project manager for Mzinga incubation, Ralph Tseka, said the project has registered over 3.5 SMEs and disbursed about K60 million to the project participants.
The Mzinga Incubation Project is a five-year World Bank-funded project run by the Malawi Stock Exchange (MSE) through Fines to the tune of $86 million.