Launched last December, the GEM portal is a dedicated online platform designed for SMEs in need of raising capital for retooling operations, increase productivity, or to increase their product range and or to expand into diversified markets. Implementation of the GEM portal follows feasibility studies that commenced in January this year with various stakeholders such as our development partners — the United Nations Capital Development Fund (UNCDF).
The feasibility study further enabled FINSEC to calibrate the platform based on feedback from targeted SMEs and other market participants. The positive outcome from the feasibility study informed the implementation of the platform to help enterprises raise capital through a safer and regulated market.
A total of 17 SMEs across various sectors, two fund managers, four nominated advisors, two commercial banks and one mobile money operator registered on the platform during the pilot phase to play various respective roles in facilitating, identification and funding of deserving high growth SMEs.
There are different enterprises that are driving the economy and in need of capital for expansion. But these are not big enough to list on the stock exchange. Capital raising options for these companies are limited yet these are the ones driving the economy. The GEM Portal is a platform suitable for them to raise capital for their expansion.
The GEM portal enables enterprises to apply for funding and possible listing online. The funding and listing pathways available on the GEM market include short, medium and long-term debt, equity finance, restricted offers, pre-initial public offering (IPO) placements, private placements leading to full IPO and listing in some cases.
The portal utilises alternative data analytics through integrations to financial services providers of the applicants and uses digital algorithms including inbuilt artificial intelligence capabilities to analyse, score and screen applicants for suitability of funding in real-time. On the other hand, the platform admits financiers who can register as qualified investors after demonstrating their investment experience and understanding of the investment risk.
Institutional investors, fund managers, corporates, high net worth individuals, the diaspora, foreign investors and development finance institutions are eligible to participate as qualified investors and can all register online. In addition, the platform admits nominated advisors online and provides them with a pipeline of applicants that may require advisory services to strengthen their applications.
The FINSEC Growth Enterprise Market comes with a complete suite of support services to complement the GEM Portal technology with incubation and accelerator services for applicants showing promise but needing a helping hand to make them suitable for funding and/or listing.
The platform is designed to make it easy and cost effective for all the participants in the listing and/or funding value chain as it promotes financial inclusion as well as deepen the capital and financial markets by enabling easier access to the capital markets by a broader range of issuers and investors.
Prospective SMEs complete an online application for raising capital through either equity listing on the FINSEC Exchange or through debt financing by investors. The interactive online form has an in-built comprehensive scoring and rating mechanism of each input by the applicant, indicating to the applicant how well they are doing and the prospects of their application. Applications that meet the predefined minimum score will be exposed to various providers of capital.
Through ease of access using technology and the internet, the GEM Portal will extend its reach to a growing number of enterprises across all sectors of the economy in all the provinces of the country. SMEs also benefit through improved corporate governance structures as determined by the on-going obligations expected of every listed company.
The GEM Portal is indeed a panacea to capital raising by companies who have faced numerous challenges in accessing cost effective capital for the sustainable growth of the industry.