The Nigerian Stock Exchange (NSE) may give more incentives to small and medium scale companies to list their shares as part of its contribution to the development and growth of the Nigerian economy.
The indication came during a recent one-day workshop in Lagos, which the Nigerian Association of Small Scale Industrialists (NASSI) organised for SME owners and stakeholders.
The NSE has the Alternative Securities Market (ASeM), which is a platform for small and mid-sized companies with high growth potential. ASeM was created for these companies to access low cost and long-term capital from the capital market.
However, despite the existence of many SMEs capable of meeting the listing requirements to list on the ASeM, only 12 companies are quoted in the sector of the stock market. THISDAY checks revealed that the Exchange gave NASSI officials assurance of its readiness to assist SMEs access the capital market for cheaper funds.
Although details of incentives could not be ascertained, General Manager/Head, Listing Sales and Retention, NSE, Mrs. Taba Peterside, told participants at the workshop that listing on the exchange would benefit them in many ways.
"It leads to reduction of financial burden and spreading of risk amongst shareholders in raising capital to embark on developmental projects; post- listing requirements ensure proper accounting standards and controls for proper management of financial resources and corporate governance; it is a membership of a global platform that affords brand visibility and credibility enhancement.
"It leads to capacity building through access to a bouquet of discounted value added services that enhance operational effectiveness; and it gives professional guidance with designated advisers to ensure organisation benefits from and maintains its listing status," Peterside said in a presentation.
According to her, SMEs are expected to act as catalysts for the socio-economic transformation of Nigeria, adding that they represent the avenue through which the Federal Government of Nigeria can achieve poverty reduction and employment generation.
She noted that SMEs can build capacity to provide inputs for the industrial sector of the economy on a sustainable basis.
"However, despite the widely acclaimed vital role of SMEs in economic growth and development of a nation, SMEs in Nigeria face a range of challenges that undermine full economic benefits. But with the listing on exchange, the challenge of lack of access to funding would be taken care," she said.
Peterside said some of the challenges of SMEs included: "Increased cost of operations due to inadequate basic public infrastructure, including access roads, power, security; inability to build capacity required to deliver results due to high turnover and informal nature of operations, which undermines strategies, policies, processes and corporate governance."