The Nigeria Stock Exchange has said that Small and Medium-Scale Enterprises could avoid the difficulty in accessing low-cost and long-term capital as well as reduce perceived high risks and interest rates if they take advantage of the opportunities of listing equities in the capital market.

Speaking at a workshop organised in partnership with the Nigerian Association of Small Scale Industrialists, in Lagos on Thursday, the General Manager/Head, Listings Sales & Retention, NSE, Mrs. Taba Peterside, said the Alternative Securities Market board was specially created for small and medium-sized companies with high growth potential.

She said, “The Micro, Small and Medium Enterprises remain the backbone of the development of any economy and the driving force of national growth, therefore, ASeM board provides platform to drive growth and development of SMEs through long-term capital injection and sound corporate governance.

“Leveraging the capital market through the NSE also provides SMEs with reduction of financial burden and spreading of risk among shareholders in raising capital to embark on developmental projects; post listing requirements ensure proper accounting standards and controls for proper management of financial resources and corporate governance;

“Membership of a global platform that affords brand visibility and credibility enhancement; capacity building through access to a bouquet of discounted value added services that enhance operational effectiveness; professional guidance to ensure that organisations benefit from and maintain their listing status are some of these benefits.”

Peterside further said that through listing on the NSE, SMEs can overcome various challenges comprising the difficulty in accessing low cost, long term capital due to high cost of funds as a result of perceived high risk and high interest rates; increased cost of operations due to inadequate basic public infrastructure, including access roads, power and security,among others.

She said, “The inability to build capacity required to deliver results due to high turnover; informal nature of operations, which undermines strategies, policies, processes and corporate governance; lack of proper accounting standards, controls and management of financial resources remain some of the challenges of SMEs.

“The capital market is, therefore, the preferred option for raising low cost, long-term capital for Small and Medium Scale Companies in Nigeria, looking to grow and develop into sustainable institutions.”

She noted that there was no need for fear of loss of control by entrepreneurs since owners may retain up to 85 per cent of total shareholdings of the company, as requirement was for at least 15 per cent minimum public ownership.

Early this year, the Securities and Exchange Commission approved the recent amendments proposed by the NSE to its listing rules as part of its new initiatives to achieve the N1tn mark in five years.

Source: Punch/Udeme Ekwere