The Nairobi Securities Exchange (NSE) unveiled NSE Connect today, a state-of-the-art digital platform with the aim of revolutionizing investment opportunities for small and medium-sized enterprises (SMEs) in Kenya. The innovative platform, launched by NSE CEO Geoffrey Odundo, is designed to bridge the gap between companies seeking capital and potential investors, providing alternative funding avenues beyond traditional equity and debt markets.
The vision behind NSE Connect is to streamline the capital-raising journey for companies, offering a platform that expedites the listing process and provides unprecedented access to a pool of investors. Odundo emphasized that the platform would act as a catalyst for enterprises, granting them access to investors and facilitating a digital due diligence process alongside nominated advisors.
“NSE Connect will provide various benefits to companies including access to investors, a shortened listing process on the NSE, access to a Digital Due Diligence Process and Nominated Advisors, and incubation,” he added.
Also addressing the launch was Ngechu Mary, Director of SMEs and Startups at the Kenya Private Sector Alliance (KEPSA), who underscored the pivotal role SMEs play in Kenya’s economic landscape. She highlighted that 92.2 percent of SMEs are micro-enterprises, facing significant hurdles due to a lack of formalization and scalability. Constrained by limited information and financial resources, these enterprises struggle to break through the barriers hindering their growth.
Ngechu emphasized the urgent need for a mindset shift among business owners, urging them to consider alternative avenues for raising capital beyond the conventional reliance on banks. She urged the NSE to not only offer financial aid but also to build trust among SMEs, emphasizing the importance of creating a symbiotic relationship where SMEs receive funding while maintaining autonomy and control over their businesses.
The NSE’s new initiative has the potential to revolutionize the financial trajectory of Kenya’s SME sector. By providing an alternative route to raise capital, the platform aims to support SMEs in expanding their businesses beyond the limitations of individual entrepreneurs. This strategic move could unlock immense potential, given that the SME sector contributes a significant portion of the country’s labor force.
In a passionate call-to-action, Mary stressed the need for a paradigm shift in acknowledging the vital role played by SMEs in the country’s economy. “If the SME sector is contributing 90 percent of labor, then we should be contributing 50 – 90 percent of the country’s GDP,” she stated. This sheds light on the untapped potential within the SME ecosystem and the transformative impact NSE Connect could have on unleashing this potential.