Uganda Securities Exchange Creates New Window for SMEs' Capital Mobilisation

Nov 28, 2022 | The Exchange - All Africa

Through USE Edaala, USE is seeking to provide a new window through which small and medium enterprises can mobilise capital for long term investment.

The Uganda Securities Exchange said it has created a Specialised Market known as USE Edaala.

This unquoted securities platform will support companies which do not meet listing requirements on the main exchange to access long-term capital.

The USE currently has 18 companies listed on Main Investment Segment, with only two corporate bonds and more than 34 treasury bonds.

Uganda Securities Exchange has the Growth Enterprise Market Segment (GEM) which has failed to takeoff. USE noted that the segment had attracted low public participation thus forcing it to rethink on a new way through which small and medium sized companies can be revitalized to participate in equity markets before upgrading to publicly listed companies in the stock exchange.

  • The Uganda Securities Exchange has created a Specialised Market known as USE Edaala,
  • The new segment will allow companies to access long term capital through private placements, a wider pool of domestic and international investors, flexible admission and regulatory compliance requirements.
  • The USE currently has 18 companies listed on Main Investment Segment, with only two corporate bonds and more than 34 treasury bonds.

The segment was established in 2012, with an objective to create a window for small and medium-sized companies, through which they would raise capital to accelerate growth of their business offered against flexible listing requirements.

Commenting about the new segment in Kampala, the USE chief executive officer, Mr Paul Bwiso, said the name "USE Edaala" was derived from a Luganda word Edaala, which means a ladder, because of underlying symbolic meaning of growth, raising to next level, bridging gaps and scaling heights.

"We think this is exactly what USE Edaala will do for small and medium businesses," he added, noting that any private or public company that is operating and has been incorporated in Uganda, will be eligible to apply to participate in the market provided it has minimum net capital of Shs500m.

A Small and Medium Enterprise (SME) in Uganda, is business whose operation has a threshold of at least Shs 100 million in total assets and employing between five and 250 people... Read more on All Africa

Source: All Africa

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