Three Ghanaian companies have received approval to access the ‘SME Listing Support Fund’ to facilitate their listing on the Ghana Alternative Market (GAX).
The GAX has been established by the Ghana Stock Exchange (GSE) to facilitate the mobilization of long term capital by SMEs and other indigenous companies.
Deputy Managing Director of the GSE, Ekow Afedzie, says the successful share floatation of the three firms will mark the official launch of the alternative market.
“So far the interest is quite good; we’ve had three companies applying to utilize the funds already, we’ve approved them and we are hoping that very soon we’ll have these three companies floating shares onto the market and that will serve as a good example for others to follow suit,” he said.
The idea of the Ghana Alternative Market is to make it easier for small businesses to list on the stock market by shortening procedures and reducing requirements for listing.
According to Mr. Afedzie, cost has been lowered and incentives introduced to make the market attractive to SMEs.
The GSE has also intensified education to promote opportunities in listing on the alternative market.
Investment advisory firm, Prestige Capital, is leading activities to get businesses in the Ashanti region to take advantage of the GAX.
Chief Executive Officer, Prince Acheampong, tells Luv Biz rural banks and microfinance companies should turn to the GAX to access long term financing.
“The first thing is to have access to very cheap long-term funds because usually they do on-lending; and if you take depositors’ funds, for instance three months investment, you can’t use that money to engage in any capital intensive project like building branch networks. But if you list on the Ghana Stock Exchange, you’ll be able to raise that capital required for those expansion,” he opined.
Mr. Acheampong added that trading on the stock exchange helps build good brands and enhances the credibility of the listed company.
SMEs with high growth potential can raise a Gh250,000 minimum capital on the GAX.
Story by Kofi Adu Domfeh
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