Rwanda Stock Exchange will soon introduce Small and Medium Enterprises (SME) market segment commonly known as alternative investment market for SME’s in a bid to ease access to finance, which is a major impediment for the small and medium business in the country.
The move comes after several surveys conducted have indicated that access to finance is the major impediment faced by SME’s in their quest for growth, yet they constitute 90% of total businesses and are the biggest baseline employers.
Currently Capital Market Authority is running a sensitization program to get SME’s to raise funds on the Rwanda stock exchange. This campaign aims to discourage individuality culture and promote disclosure.
With the legal frame work under which the SME market segment will operate in place, the SME market segment hopes to attract small and medium businesses such as restaurants, cooperatives, distribution businesses, transport companies, hotels among others.
Through SME market segment, SME’s will be able to offer corporate bonds and commercial papers and through this platform SME’s will raise funds on the Rwanda stock exchange RSE). Unlike the Rwf500 million capital requirements for any company to register on the stock exchange, participants at the SME market segment will simply be required to disclose their prospectus.