The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture; and the Manufacturers Association of Nigeria have called on the Nigerian Stock Exchange to lower listing requirements for Small and Medium Enterprises on its Growth Board to increase their participation in the capital market.
The stakeholders made the call on Wednesday during the panel discussion on ‘Accessing Finance for Business Growth in Nigeria,’ organised by the NSE.
Nigeria has over 40 million SMEs, but the country has only nine that are listed on the NSE over stringent listing obligations.
The bourse last year launched the NSE Growth Board to support companies in their growth phase, particularly SMEs.
In 2020 despite the Covid-19 pandemic, the NSE recorded over N2.5tn in capital raised by governments and Corporates in 2020 across asset classes as the NSE believes SME s could explore funding options available through the Growth Board.
Ali Madugu, a Member of the National Council of MAN said the biggest setback for SMEs in the country was the access to finance and infrastructure.
Madugu who is also the representative of MAN on the board of the Corporate Affairs Commission noted that more SMEs could participate on the Growth Board if the listing requirement is lowered by the NSE.
Madugu said, “The way and manner that businesses under SMEs, most especially in the agro allied sector will be able to participate and access capital through the stock exchange will increase if the stock exchange will be able to still bring down the benchmark of entry parameters of the market.
“It will definitely help, most especially by bringing in small scale businesses either farmers, processors into corporative and by giving the corporative access to tap capital from the stock exchange.
“That will really go a long way in bringing up a lot of participation of SMEs into the Nigerian Stock Exchange market.”
The National President of NACCIMA, Saratu Iya Aliyu, during the session said SMEs across the country are faced with huge financial challenges that limit their ability to meet expectations to drive the economy.
The NACCIMA Boss pointed out that the rigors of listing of small businesses on the bourse were one of the biggest impediments for businesses to raise funds through the exchange.
She said, “It is my sincere hope that this initiative will complement other available funding mechanisms of MSMEs such that businesses will remain afloat to support economic progress and linkage with bigger companies.
Aliyu said there was a need to focus on non-traditional solutions to problems that have continued to impact SMEs,adding that NACIMA would work with market operators to promote transactions and interest in the Growth Board.
The NACCIMA boss said, “Going forward, I am hopeful that today’s initiative by the NSE will spur greater interest in the activity of the Growth Board by the private sector.”
Reacting Olumide Bolumole, Divisional Head for Listing Businesses at the NSE acknowledged the difficulties SMEs face in the country to raise funds for expansion.
Bolumole said, “The reality and headwinds faced by SME operators are quite daunting. The economic landscape has proven to be challenging with infrastructural and other burdens amplified with SMEs.
“In view of challenges experienced by SMEs, there is a need for these companies to scale allowing them to better navigate the business environment thus requiring medium to long-term capital.”
The NSE assured the stakeholders that it would review all recommendations and make adjustments where applicable to further facilitate the growth of the SMEs.