Dynamic Nigerian entrepreneurs are in focus after the Nigerian Stock Exchange launched a growth board for fast-growing small and medium enterprises (SMEs) to help businesses raise long-term risk capital and grow.
At the 29 January the bourse outlined the services on offer for businesses in the growth cycle. Services offered include: pre-listing diagnostics, institutional services (such as audit, financial advisory, legal advisory, corporate strategic advisory), investor relations, analyst coverage, corporate access and corporate governance.
According to the press release , Oscar Onyema, OON, CEO of the exchange told of collaboration at the launch: “We have partnered with relevant stakeholders to design a suite of cost-effective services to give listed companies a competitive edge within their respective industries while stimulating investors’ interest through enhanced information delivery.”
The new board has Entry Segment for companies with market capitalization from ₦50m ($136,000), compared to Standard Market for companies with market capitalization from ₦500m. Investors choose segments according to their investment preferences.
There other boards include the Main Board for well-established companies with a track record of commitment to high standards of disclosure and corporate governance. The Alternative Securities Market (ASeM) focuses on small to mid-sized companies. The Premium Board was added in August 2015 for companies that meet the most stringent listing criteria of capitalization, corporate governance and liquidity and aims to provide a platform for greater global visibility to attract global capital flows and reduce the cost of funding.
Mr Onyema outlined the contribution of SMEs to jobs and growth in Nigeria: “SMEs have contributed about 48% of the national Gross Domestic Product (GDP) in the last 5 years, according to the Nigeria Bureau of Statistics. This segment of the economy also accounts for 96% of operational businesses and 84% of employment.
“Despite these significant contributions, SMEs face significant challenges, including lack of right-sized and right-priced financing. With the launch of the Growth Board, the Exchange is, therefore, offering issuers relaxed entry criteria as well as less stringent ongoing listing requirements to allow for greater accessibility to finance, global visibility and credibility through corporate disclosures.”