Alternative trading platform, Finsec has set up a Private Market for enterprises of all scale to source capital through an array of financing instruments on its automated Growth Enterprises Markets (GEM) portal which started off as a pilot project but has so far received more than 145 applications.
The idea behind the Private Markets is meant to facilitate interface between investors and enterprises, mainly emerging businesses that are in need of capital but were not able to list on the Zimbabwe Stock Exchange.
Finsec chief executive officer, Collen Tapfumaneyi said about US$ 7.5 million has already been secured for capitalizing qualifying applicants following pledges by 5 financiers.
“The private markets are meant to raise debt financing and equity financing through the digital platform that connects enterprises and financiers through an automated screening, pipeline building and will assist these enterprises to discover their value,” said Tapfumaneyi.
Advantages of enterprises listing on the market include debt financing, equity financing, invoice discounting, visibility and price and value discovery.
As for financiers, the platform will assist in risk analyzing, screening of prospective enterprises, information standardization and facilitating transactions between investors and financiers.
Zimbabwe’s capital markets often face criticism of being limited in their scope of financial instruments at a time other markets are diversifying investment options.
ZSE has just about 51 listed companies including Exchange Traded Funds (ETFs) while the Victoria Falls Stock Exchange (VFEX) has only 4 securities trading.
“In Zimbabwe, investors are only exposed to a handful of companies on the ZSE which is not a good reflection of where we want our capital markets to be. Very few companies are listed there and this means many investors have limited options to invest in,” said Tapfumaneyi.
He also said there is a growing appetite for investing especially among the youths in Zimbabwe who have embraced foreign currency trading and crypto currencies.
“There is this hunger in young people wanting to invest. The requirements to trade in foreign currency, commodities and crypto-currency are too cumbersome and need one to have master card, foreign currency and so forth yet they are meeting these requirements. It shows that the local capital markets have starved them of these investment options,” he added.
Finsec is also set to launch the Derivative Market which will go live on June 1, this year.
Derivatives are financial markets whose value is derived from the value of underlying assets such as indices, currencies and commodities which will be limited to just two instruments, the Options and Futures markets.
