10 February 2019

Rwanda: Five SMEs Could Soon Be Listed on Rwanda Stock Exchange

Photo: New Times

Five local small and medium enterprises could in coming months be listed on the Rwanda Stock Exchange, according to officials at the agency.

The firms have been found outstanding from more than 10 SMEs, which signed Memorandum of Understanding with Rwanda Stock Exchange last year.

The five small and medium enterprises have showed positive signs and ability to meet the requirements as prescribed in the last consecutive meetings held by both parties, according to Celestin Rwabukumba, the Chief Executive of Rwanda Stock Exchange.

This follows a two-month campaign, dubbed "access and grow", launched in 2018, which was organised by Rwanda Stock Exchange in partnership with Capital Market Authority and USAID targeting about 300 SMEs from all sectors of the economy as a way to enable them access long-term investment capital.

The campaign was followed by RSE listing forum in March 2018 which convened 100 SMEs drawn from different regions of the country where both parties agreed on steps and process.

However, officials say that the process is rigorous but is supported by the Rwanda Stock Exchange. Listing on the local bourse is an alternative to accessing capital of the firms' expansion.

"The platform will not only provide access to long-term investment capital but also the players will be getting investment advice and legal assistance, which is normally costly.

Basic requirements for qualify listing on the bourse include, quality governance where firms should at least have an active board with a minimum membership of three. The firm should have been in operation for the last two years with books of accounts regularly reviewed by an external auditor.

Rwabukumba said that they believe that the firms that are going to be listed would have unprecedented opportunity to access capital at little cost.

A large section of private sector players in the country have for long decried high costs of access to capital and funding owing to limited alternatives with the most common option being commercial banks which lend at relatively high interest rates.

"It is the right process to raise the funds and putting them to better use as the system framework is designed to keep close supervision to ensure funds are used accordingly," he said.

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