By Steven Godfrey Mkweteza.
The Reserve Bank of Malawi (RBM) has asked the small and medium enterprises in the country to consider registering on the stock markets so as access finances to boost their businesses.
Central Bank deputy governor William Matambo, said this in Blantyre during the launch of the Mzinga incubation project.
Matambo said by registering on the Malawi stock exchange, the small and medium enterprises will access cheaper capital gains as compared to other long term instruments.
“Over the years, the stock market hasn’t been successful and it has been slightly expensive for SMEs to register for stock markets. However, we have now soften modalities to allow many SMEs to register and access finances through the stock market,” he said.
Matambo added; “This is also one way of promoting capital and money markets to help SMEs grow their businesses.”
According to Matambo, lack of experience and knowledge on the operation of the capital markets and how to access finances through Malawi Stock Markets has been a contributing factor to the dwindling of most SMEs in the country.
In a separate interview, chief executive officer for Malawi Stock Exchange (MSE) John Kamanga, said the company target to register ten SME group for the year.
He said the qualified participants will be mentored for free in good corporate governance, business reporting and accounting before accessing the finances.
“We are trying to open up the SME sector by supporting them with finances. This is because many SMEs were not registering on the capital markets for fear of losing ownership of their businesses,” said Kamanga.
The CEO also the company has also reduced to almost 50 percent for the qualified SMEs to list on the stock market.
He said the SMEs need to have a share capital of MK250 million as a qualification for the finances.
The project manager for Mzinga incubation, Ralph Tseka, said the project has so far registered over 3.5 SMEs and disbursed about MK60 million to the project participants.
Mike Mlombwa, president for the indigenous business association of Malawi(IBAM), said the project is the big boost to the SME sector since lack of access to finances were the major setback to the growth of the sector in the country.
“We have bankable projects that need financial support but tough policies and economic shocks such as covid-19 and cyclone Freddy have also negatively impacted our growth,” he said.
However, Mlombwa urged the authorities not to politicise the project, saying many tangible projects in the country have failed because of political interference.
Mzinga incubation project is a five year World Bank funded project.
The project is run by Malawi stock exchange (MSE), through Fines to the tune of 86 million dollars.
