CAPITAL MARKETS GROWTH AND SMEs PARTICIPATION


Robert, a motor vehicle upholstering specialist

With diligence, a motor vehicle upholstering entrepreneur cuts a piece of leather material to use in refurbishing cars seats, and then sitting behind an old sewing machine to join the pieces together.
In a moment the final product comes out just like a factory made car seat.
As an entrepreneur, 27 year old Robert Banda of Lusaka spends much of his time in a makeshift workshop doing this to earn a living.
For Robert Banda, who has little knowledge to list on the stock exchange or other sources of investment, his business may remain small for many years to come. 
The capital markets create a good avenue for the population to participate in the financial sector by providing alternative investment.
But For the Small and Medium Scale Enterprises - SMEs sector which provides the greatest job opportunities in the country, its little recognition in the flow of investable resources besides other factors, drives many people away.
Bank of Zambia Deputy Governor, Operations Dr. Bwalya Ng’andu knows that many Small Medium Enterprises - SMEs have a huge challenge penetrating the capital markets due to high risks associated with the sector.
“Although the supply of bank loans can be critical to the growth and subsistence of SMEs, we believe that capital markets can inevitably create vehicles that could possible play a role in influencing risk flow towards SMEs,” said Dr. Ng’andu during the Securities and Exchange Commission - SEC Chairman’s Quarterly Breakfast Discussion in Lusaka.
As part of the strategy to encompass more SMEs to list on the stock exchange, Dr. Ng’andu calls for the provision of additional incentives and assistance to grow the sector.
The other measure is to maintain a stable and sound macroeconomic policy on the environment.
At the same event SEC Chairperson, Chintu Mulendema also noted that the Capital Markets prospects for 2015 looks bright exhibited by the number bonds listing that are on the rise, besides other positive developments in the sector.
The LuSE All Share Index has risen by over 6,000.0 points since its inception to 6,158 points as 12th February 2015, with a total of 21 listed companies, whereas the number of quoted companies stands at 8.
In all this for a country like Zambia, the criticality of SMEs in the crusade against joblessness and poverty reduction is never a small matter.

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