Small and Medium Enterprises (SMEs) in Kenya will be able to list at the Nairobi Stock Exchange before the end of this year. Listing is described as the process of changing a business entity from being private owned to being public owned and thus allowing its shares to be traded on the stock market.
The Nairobi Stock Exchange (NSE) is currently designing a market segment for SME’s, dubbed the Small and Medium Sized Exchange (SMEx) which will enable small businesses to trade at the stock market.
The SMEx is expected to have less strict regulations compared to current requirements which have made it impossible for small businesses to enter the capital markets. Currently, companies that want to list at the stock market through the existing market segments should have a minimum share capital of between Ksh. 20 to 100 million. This revenue is way beyond the ability of most SMEs.
Other countries in Africa that have either established a new market segment for SMEs to list at the capital market , or are in the process of creating one include , Uganda , South Africa , Zimbabwe and Zambia.
One of the reasons why small businesses are being encouraged to list, is that it will help them to have access to alternative financing options for investment and expansion. It also improves the image of the company in the public view
Image: Stock Chart by Michelle Meiklejohn on www.freedigitalphotos.net
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April 21, 2011
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