The African Development Bank (AfDB) said it is ready to support the listing of Small and Medium Scale Enterprises (SMEs) on the Ghana Alternative Exchange (GAX) with an interest-free funding of US$600,000 over a two-year period.
The amount, which is to be channeled to the Listing Support Fund established by the Ghana Stock Exchange (GSE) with assistance from the Venture Capital Trust Fund with seed money of GH¢760,000 will facilitate the pre-listing processes for interested companies.
Mr. Kofi Yamoah, Managing Director of the GSE said: “AfDB decided about two years to join. All the paperwork is in place. Between October 2015 and April 2017 it is making available US$600,000.
“The idea is that it will come to the Listing Support Fund established by the Exchange and Venture Capital Trust Fund with GH¢760,000. If any company comes seeking application to the GAX, it can tap into this fund to pay advisory services; these are essentially the financial valuation, legal advisory services, and sponsoring brokers so that they can prepare such companies to list. At the end of the day, the company repays the amount into the fund at no interest so that others can tap into it.”
The concept of the alternative market is to address complaints by SMEs about the stringent criteria which make it impossible to use the main stock market to raise equity for their businesses.
The GSE is targetting SMEs with a minimum stated capital of GH¢250,000 and which have been in operation for at least a year. It will also consider companies that have the potential to be profitable.
Ordinarily, a company should have been in operation for at least three years with a minimum stated capital of GH¢1million to qualify to list on the main exchange. And once listed, the entity is required to publish its financial statements quarterly.
For the new SME market, listed entities will be mandated to publish their statements half-yearly.
“All of us realise that the effort must be concentrated on the SMEs. They have more ability to expand, grow, take on more numbers as far as employment is concerned and help the economy grow faster. The big ones are doing that work, but many of them have reached the plateau of employment and so forth.
“There are thousands of SMEs and it would be negligence of our duty not to help them come to the marketplace, and I am pleased that Intravenous was very determined to list on the GAX.
“We have had a number of collaborative workshops with the Association of Industries, and we know quite a number of their members are interested in bringing their companies to the market. They will only want to see success stories, and the listing of Intravenous Infusion Limited will help add to the success stories,” Yamoah said.