E.A bourses to support SMEs access to funding

East African Securities Regulatory Authorities have agreed to support the establishment of a Capital Markets Advisory Centre to enhance access to finance for small and medium enterprises (SMEs). The center aims to provide technical support to SMEs to develop a credible pipeline for accessing private and public market-based finance. Robert Mathu, Executive Director of the Capital Markets Authority (CMA), discussed the initiative in an interview with CNBC Africa. Mathu expressed satisfaction with the recent Initial Public Offering (IPO) of INM, citing positive public response and the need to wait for application tallies to determine subscription levels. The focus of the newly established support institution will be on pre-listing, listing, and post-listing support services for SMEs. Mathu explained that the majority of East African economies consist of SMEs, which often face challenges when attempting to raise capital for expansion or working capital. He highlighted the importance of governance structures and advisory services in accessing capital markets, noting that small and medium enterprises may lack the capacity or resources to engage professional intermediaries independently. Addressing the cost element, particularly legal and corporate restructuring expenses, Mathu clarified that the center will seek funding from development partners, funds, and potentially governments to support SMEs in scaling up their operations economically. He emphasized the center's focus on securities markets, distinguishing it from existing initiatives in banking and micro-lending. The regional initiative aims to scale up the market size and mobilize necessary resources across East African countries. Mathu highlighted the importance of regional collaboration to facilitate access to finance for SMEs and ensure equitable participation across various market segments. On the topic of FinTech and crisis management, Mathu discussed the need for regulators to stay abreast of rapidly evolving trends, particularly in crowd-funding. He referenced collaborative efforts within the East African markets to develop policies for regulating the crowd-funding space with support from organizations like FSD Africa and Cambridge University. Regarding the constitution of IPOs and listing requirements, Mathu emphasized the importance of international markets for accessing hard currency and engaging with high-standard investors. He underscored the value of international exposure in enhancing market credibility and meeting global investor expectations. In conclusion, Mathu expressed optimism about the ongoing developments in East Africa's capital markets and underscored the significance of initiatives like the Capital Markets Advisory Centre in supporting SMEs' access to finance. The establishment of the center represents a strategic move towards fostering economic growth and financial inclusion for small and medium enterprises in the region.