SMEs interested in listing to benefit from APDF subsidies

Accra, July 17, GNA - Small and Medium Scale Industries (SMEs) interested in listing on the Ghana Stock Exchange (GSE) would now benefit from 30 to 70 per cent subsidy of professional charges from the Africa Project Development Fund (APDF), an arm of the International Financial Company (IFC).

The initiative is aimed at assisting the companies and enterprises in the agro-business, services, wood and wood processing to source interest and cost free long-term capital to expand their businesses.


Only alcoholic and trading businesses are excluded from this package. To introduce the package to SMEs, Managers of the Exchange in collaboration with the APDF launched the first in the series of seminars in Accra on Thursday for about 30 members of Association of Ghanaian Industries (AGI).


Mr Samuel Dzotefe, Acting APDF Regional Manager, said at the seminar that one of the deterrent factors that prevented small companies from listing on the Exchange despite its numerous benefits was the cost of fees for the various processes.


The introduction of the package, therefore, serves as the Fund's contribution to encourage SMEs to list on the Exchange to enhance their businesses and promote good business practices through the acquisition of long-term funds.


Mr Dzotefe said the Fund's primary function was to pre-finance and post-finance SMEs.

However, the focus has now shifted to assisting the SMEs in the regional and district capitals to source interest free capitals on the Exchange.


Mr Dzotefe said the Fund would intend to achieve this aim through promotional activities such as the seminar.


The Fund would also organise capacity building programmes for brokers and some investment banks in financial planning and management and information systems.


Mr Dzotefe said the training of the brokers was necessary because they would be expected to assist interested SMEs to prepare documents and give advice. He said the Fund expected that its support would go a long way to even the playing field for both the African entrepreneur and expatriate.


Mr Ekow Afedzie, General Manager of the GSE, said the Exchange had introduced a fast track approach to the mode of listing. Under the new approach also known as the provisional approach, companies are expected to go through two stages of providing up-to-date financial status and brief write-up to acquire a provisional listing status.

Mr Afedzie said the procedure, which took a maximum of one month, aimed at encouraging private sector companies and the government to privatise state-owned enterprises through the Exchange.


He said companies, which listed through this process, were given up to six months of a transitional period to go through the other processes at a slower pace to formally list on the Exchange.


The initial listed process took up to six months or more due to what some companies described as cumbersome procedures.


The GSE which now has 25 companies listed to trade on its floor requires a basic stated capital of a 100 million cedis to be on its first list, 50 million for second list and 20 million for the third list.


Companies in the SME category wishing to list on the Exchange can do so with as low as five million cedis.

Mr Afedzie said this level of capital among other measures showed how far the Exchange had gone to relax requirements for companies to seek long-term capital.


He encouraged both managers of companies and the public to take advantage of the current gains on the Exchange to list and invest. The Exchange has this year recorded 58 per cent gains on total investments listed.


Mr Elizabeth Villars, President of AGI, said apart from factors such as unstable macro-economic situation that made the playing field uneven, Ghanaian business owners must move away from the needless self imposed concept of business ownership.


She said the trend persists as a result of lack of jobs, which leaves the unemployed with no alternative but to employ themselves by starting small businesses with little capital.