Bulawayo, (New Ziana) — Large businesses will not be allowed to migrate from existing capital market platforms to the recently launched Zimbabwe Entrepreneurship Exchange (ZEEX), which was specifically established to cater for small and emerging enterprises, the Securities and Exchange Commission of Zimbabwe (SECZ) has said.
The assurance came after concerns were raised by small businesses over fears that larger companies could dominate the platform and sideline them.
In an interview on Wednesday, SECZ Commissioner Tichaona Mushambadope said the ZEEX was established to democratise access to the capital market while protecting small entrepreneurs from being crowded out by bigger, established companies.
The Zimbabwe Stock Exchange (ZSE) recently launched the ZEEX in Bulawayo as an entrepreneurship-focused platform aimed at assisting small and medium enterprises raise capital as well as access investment opportunities in a regulated market environment.
The platform will offer efficient, transparent and cost-effective capital-raising and trading mechanisms tailored to the needs of emerging businesses.
“There is no migration that is going to happen from the bigger entity, your ZSE, your VFEX to ZEEX. If entities then get to grow, they go to list on main boards. But we will not allow an entity that is currently sitting on ZSE or VFEX to downgrade and list on ZEEX. I think that must be very clear,” Mushambadope said.
He said the approach would ensure that the ZEEX remained focused on its core mandate of supporting small to medium entrepreneurs (SMEs) while creating a pipeline of businesses that could eventually graduate to the main boards of established exchanges.
Mushambadope said SMEs were the heartbeat of the economy, contributing between 60 and 80 percent of Gross Domestic Product (GDP), while accounting for about 95 percent of individuals benefiting from the sector.
He said the ZEEX would therefore assist in transforming the capital market from a preserve of a few large players into a more inclusive platform that does not leave anyone behind.
Mushambadope likened the development of the ZEEX to the establishment of the Nasdaq in the United States, which was initially created to provide a platform for smaller companies but later became home to major global technology companies such as Apple, Intel and Microsoft.
He said the ZEEX could similarly provide a platform for Zimbabwean innovators and entrepreneurs to grow their businesses and develop solutions suited to the local economy.
Mushambadope also stressed the need for strong regulatory safeguards to protect both investors and entrepreneurs as the capital markets in the country modernise.
He said investor protection should be complemented by measures to prevent hostile takeovers and ensure entrepreneurs retained confidence in bringing their ideas to the market.
Investor and entrepreneur education would also be critical to the success of ZEEX, particularly as businesses adapt to technologies associated with the Fourth Industrial Revolution, including artificial intelligence and blockchain, he explained.
Mushambadope said the success of the ZEEX would require the collective efforts of the government regulators, financial institutions, development partners, the Diaspora, entrepreneurs and investors.
He said the capital market remained relatively small compared to the size of the economy, noting that South Africa’s capitalisation was about three times its GDP, while Zimbabwe’s stood at about 16 percent.
New Ziana
