Stakeholders have welcomed the recently signed Memorandum of Understanding (MoU) between the Zambia Development Agency (ZDA) and the Lusaka Securities Exchange (LuSE), aimed at improving access to long-term capital for businesses and strengthening private sector-led economic growth. Capital Markets Association of Zambia (CMAZ) President Elijah Kabaso told ZANIS in an interview that small and medium-sized […]
Stakeholders have welcomed the recently signed Memorandum of Understanding (MoU) between the Zambia Development Agency (ZDA) and the Lusaka Securities Exchange (LuSE), aimed at improving access to long-term capital for businesses and strengthening private sector-led economic growth.
Capital Markets Association of Zambia (CMAZ) President Elijah Kabaso told ZANIS in an interview that small and medium-sized enterprises (SMEs) can access long-term financing through the capital markets as an alternative to borrowing from banks.
Mr Kabaso explained that SMEs can raise capital through equity and debt instruments on the Lusaka Securities Exchange (LuSE), including through its alternative market, which provides an avenue for smaller businesses to mobilise financing.
He pointed out that reliance on bank loans can sometimes be costly for SMEs, while equity financing can reduce the debt burden and provide businesses with greater room to grow, adding that there is need to increase awareness among SMEs about opportunities available through the capital markets.
Mr Kabaso explained that the association is using financial literacy programmes, stakeholder engagements and the annual Capital Markets Conference and Awards to educate businesses on how they can access capital.
He disclosed that CMAZ also works with the Securities and Exchange Commission (SEC), who provide incentives for SMEs, including waivers on some listing fees.
However, Mr Kabaso said SMEs intending to raise capital through the market must ensure that their financial affairs are in order, including having audited financial statements and sound corporate governance structures.
He charged that expanding SME participation in the capital markets will help broaden access to finance, while supporting private-sector-led economic growth in Zambia.
Meanwhile, Dot Com Zambia PLC Founder and Managing Director Mawano Kambeu said being listed on the Lusaka Securities Exchange (LuSE) can help small and medium-sized enterprises (SMEs) attract foreign direct investment (FDI) by strengthening investor confidence in their governance and transparency.
Mr Kambeu noted that his company’s experience demonstrates that listing provides benefits beyond raising capital, as investors can publicly access information about a company and assess its governance and operations.
He explained that his company’s participation in an earlier Zambia Development Agency (ZDA) engagement with Zambian businesses contributed to its ability to attract FDI and support its growth.
He said investors were encouraged by Dot Com Zambia’s status as a publicly listed entity, which demonstrated that its governance structures were in place and that relevant company information was accessible to the public.
Mr Kambeu charged that the formalisation of the partnership between ZDA and LuSE is therefore a positive development that could encourage more SMEs to consider listing on the stock exchange.
The company, which is currently the only SME listed on the LuSE alternative market, said it has a responsibility to demonstrate the benefits of listing to other small businesses.
He said the visibility and success of Dot Com Zambia could serve as an example to SMEs that are looking for alternative ways of mobilising capital apart from traditional borrowing.
Mr Kambeu also said increasing the number of listed SMEs would broaden the pipeline of businesses accessing capital markets and contribute to the growth of Zambia’s private sector.
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