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How NSE’s Growth Board improves SMEs’ access to cheap capital.



Small and Medium Enterprises (SMEs) are crucial to the development of a country’s economy, especially countries in emerging economies like China, Brazil, Thailand, India, South Africa, Indonesia, Nigeria etc.

According to a report from the National Bureau of Statistics (NBS), SMEs have contributed about 48 per cent of the national gross domestic product (GDP) in the last five years, also, this segment of the economy also accounts for 96 per cent of operational businesses and 84 per cent of employment.

Despite these significant contributions, SMEs face significant challenges, including lack of right-sized and right-priced financing. Furthermore, as corporations witness the huge economic growth and burgeoning purchasing power in emerging markets, a huge debate is focused on where to find the most profit.

Should companies target the customers at the bottom of the income pyramid, where the numbers of potential buyers are large, but price points are low? Or is there a bigger payoff in focusing on the growing middle class, where customers have a greater ability to pay and rapidly expand their buying?

Analysts have been offering profound solutions to this debate with some arguing these funds should not come from the government alone, but more from the Nigerian stock market.

NSE strenghtens bourse

Recently, the Nigerian Stock Exchange (NSE), launched its ‘Growth Board’, an initiative targeted at providing support for fast-growing companies listed on the exchange.

The inventiveness of the bourse is expected to deepen the Nigerian capital market,  boost economic growth as well as providing the opportunity for SMEs in their growth phase to seize the opportunity of raising long-term capital and leveraging the exchange’s varied products and services to achieve their long-term business objectives.

Speaking at the launch of the board in Lagos, Chief Executive Officer, NSE, Oscar Onyema, said the initiative was in line with the Exchange’s focus and drive to deepen the Nigerian Capital market and its support for start-ups as well as SMES due to the harsh macro landscape in Nigeria.

Onyema said that the traditional role of the Exchange as an enabler of capital flow from areas of surplus to deficit holds good promise for its capability to support SMEs, as access to capital is the prime challenge faced by companies that are active in the SME sector.

“I must thank all our strategic business partners and value added service providers for their drive and commitment to support and grow the SME segment of the Nigerian economy. Without a doubt, the SME space remains critical to the growth of the economy.

The Growth Board aims to encourage companies with high growth potential to seize the opportunity of raising long term capital and promote liquidity in the trading of their shares. The board also presents as an avenue for companies in their growth phase to leverage the NSEs platform and varied products and services to achieve their long term business objectives”, he said.

According to him, the board is designed to offer relaxed entry criteria as well as less stringent ongoing listing requirements and allows for greater accessibility to capital flows, global visibility and credibility through corporate disclosures.

“The growth board also restructures current market segments to better meet needs along company’s entire lifecycle, that is entry segment – for companies with a Market Capitalisation from N50 million and Standard Market for institutions with a Market Capitalisation from N500 million.

The segmentation of the boards also provides alternative options for interested investors to participate in each company’s growth journey”, Onyema said. To achieve the listed company’s growth strategy and listing objective, the NSE is said to be collaborating with various strategic business partners and value-added service providers.

The NSE CEO said, “We have partnered with relevant stakeholders to design a suite of cost-effective services to give listed companies a competitive edge within their respective industries while stimulating investors’ interest through enhanced information delivery.

These services include pre-listing diagnostics; Institutional Services (including audit services, financial advisory, legal advisory, corporate strategic advisory); investor relations; analyst coverage, corporate access and corporate governance.”

Onyema thereafter beckoned at growth companies represented at the launch alongside 97 companies featured in 2019 Companies to Inspire Africa (CTIA) jointly produced by the London Stock Exchange and PWC Africa, to join the NSE Growth Board ecosystem and use the platform to achieve their strategic business objectives.

Operators’ view

Speaking to Daily Sun during the recent Capital Market Correspondents Association of Nigeria (CAMCAN) first quarter forum in Lagos, the Managing Director, APT Securities and Fund Limited, Mallam Kurfi Garba, said with demutualisation of the exchange nearing completion, the launch of the board will offer opportunity to help entrepreneurs scale their businesses and access a wider pool of investors.

For her part, Head, Emerging Businesses, Access Bank, Ayodele Olojede, noted that the bank in three years has invested significantly towards the growth of SMEs.

“We love SMEs and we do not pay lip service to SMEs and to the extent of how much we want to support SMEs, we have invested significantly in our understanding of the risk factors in that segment and sufficiently so because in the last 3 years, we have supported SMEs. in 2018 alone, we granted up to N37 billion in loans to our SME customers which won us the award globally.

We were able to achieve this feat because we introduced an innovative approach to lending and to access finance, all that the customers needs to be able to access loans is just to be able to keep good credit record and to be able to keep sales record, with that at hand, accessing capital will not be a problem”,  she explained.


The move to launch the growth board by the NSE is applaudable but due diligence should be applied in determining those start-ups that will benefit from the initiative but in all the Exchange has demonstrated that there is future for fast growing companies to access funds from the capital market.

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