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GAME-CHANGER FOR SMES: NSE CONNECT PLATFORM SET TO BOOST GROWTH
- Published On: 2023-11-17
On 17th November 2023, Ms. Mary Ngechu -KEPSA Director in charge of SMEs and Startup, and Mr. Timothy Odongo -KEPSA Business Hub Manager, represented KEPSA at the unveiling of the Nairobi Securities Exchange (NSE) Connect Platform and the graduation of the IBUKA trainees.
In his opening address, Mr. Geoffrey Odundo -CEO of NSE, commended the graduands for embracing the challenge and actively engaging in the Ibuka program. Expressing enthusiasm about the launch of NSE Connect, a flagship platform designed to link SMEs with capital, he highlighted that the training would result in SMEs that are investor-ready. Emphasizing the importance of exploring alternative avenues beyond traditional approaches, he also outlined the advantages that the NSE Connect platform brings to SMEs.
Ibuka is a premium incubation and acceleration program established by NSE PLC in 2018. The program is designed to prepare companies to raise capital and be investor-ready through various capital market options available at NSE. The program saw 29 SMEs go through rigorous training for 4 weeks, culminating today in graduation and the unveiling of the NSE Connect Platform. KEPSA collaborated with NSE to provide a pipeline for SMEs that would benefit from the program.
In his statement, Mr. Willie Njoroge -CEO of the Kenya Association of Stockbrokers and Investment Banks, extended congratulations to the graduates for successfully navigating the challenge of sentimental attachment, particularly in the context of family-owned businesses. Additionally, he pledged ongoing support for SMEs, emphasizing a commitment to provide advisory services aimed at helping them optimize their capital-raising strategies.
Ms. Ngechu, highlighted several challenges faced by SMEs, identifying access to finance as a key issue. She emphasized that the introduction of NSE Connect is a positive development, particularly in addressing challenges associated with access to finance. She noted that the platform would enable SMEs to diversify their funding sources, access long-term capital, and fuel their growth and expansion strategies. Additionally, she underscored the importance of changing the mindset of SMEs to consider alternative financing options, such as capital markets, in addition to traditional banking.
Ms. Ngechu commended the IBUKA program and stressed the significance of sharing success stories to foster trust among SMEs. She reiterated KEPSA's commitment to nurturing and uplifting small businesses in Kenya by partnering with other organizations, such as NSE, to provide SMEs with innovative products and initiatives that support their growth journey.
In a panel discussion on Financiers' Investment Considerations and Processes, the discussion highlighted key factors that investors examine before deciding to invest in a company. These factors include a compelling growth story, a sound business model, and effective governance. The discussion also emphasized the importance for SMEs to embrace digitalization, emphasizing the need for a robust KYC (Know Your Customer) system that can be updated over time. Furthermore, it was noted that there is a need for increased efforts in incubating, accelerating, and facilitating capital raising for SMEs.
In a panel discussion on Collaboration for MSME financing via capital markets, Mr. Odongo underlined the crucial role of strategic collaboration in facilitating cross-border agreements, such as the AfCFTA and other international agreements that have been signed for the benefit of SMEs. He further reiterated KEPSA’s commitment to collaborate with NSE in providing the pipeline for the NSE Connect platform. Mr. Odongo was joined by Mr. Job Wanjoyi of the Kenya Association of Manufacturers (KAM) and Mr. Leonard Mudachi, Chairman of RETRAK. The discussion highlighted that despite a continual incremental increase in financial facilities targeting SMEs over the period from 2020 to 2023, the affordability of financial products for SMEs remained a challenge. NSE Connect emerged as a great platform for addressing access to finance and governance structures. It stressed the growing necessity for partnerships to disseminate information that will aid in unlocking these opportunities.
The highlight of the event was the fundraising elevator pitches from SMEs that had participated in the Ibuka program to potential investors, followed by the issuance of certificates.