Mozambique Stock Exchange still lacks a single listed SME – Chairman

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Mozambique Stock Exchange still lacks a single listed SME – Chairman

3:12 CAT | 02 Mar 2017

O País /

Small and medium businesses operating in the country completely ignore the financing potential of the Mozambique Stock Exchange, and although 20 years old, the country’s only stock exchange does not list even one small or medium-sized enterprise (SME).

Several reasons can be offered. Among them are entry requirements beyond the companies’ capacities, poor disclosure of stock market value, fear of joining a Stock Exchange still lacking expression, and organizational deficits such as the lack of organized accounting.

The chairman of the BVM Board of Directors says that the requirements for joining the stock market were simplified in 2008, but even so, it remains very difficult to convince entrepreneurs to join.

From 2008 to 2009, companies were supposed to have a minimum of 16 million meticais of share capital, two years of audited and published accounts and a dispersion of 15 percent of the capital stock in order to be able to join exchange.

However, Sailm Valá points out, since 2009, everything has changed. Companies are now required to have four million meticais, nine months of audited and published accounts and 5 percent of capital dispersion.

Despite the simplification, no SME joined and the number of listed companies even dropped by four.

“From 2009 until today, we do not yet have any small and medium company listed on the stock exchange,” Valá admitted.

To find solutions to the problem, the Mozambican Stock Exchange and the Institute for the Promotion of Small and Medium Enterprises (IPEME) signed a memorandum of understanding on Wednesday. The goal is to publicize stock exchange financing opportunities.

On that occasion, Valá said that IPEME has the responsibility of preparing and persuading companies to join the exchange, which can offer SMEs lower interest rates than commercial banks.

IPEME director general Claire Zimba says that nothing is lacking in the institution that he directs, although he recognizes the need to be more agile.

“I wouldn’t say we’re failing. I understand that we must continually disseminate information,” he said.

After the signing of the memorandum, IPEME staff started receiving training from the stock exchange in ways to attract more SMEs.

Source: O País