Angolan stock exchange launches financing segment for small companies for their capitalisation

The Angolan Debt and Securities Exchange (Bodiva) today launched a new segment to finance small and medium enterprises, called “SME’s Segment”, by issuing debt or shares, it was announced today.

“The SME market that we are inaugurating today is designed to contribute to reducing what in our view has been the great financing deficit that SMEs (small and medium-sized enterprises) still face today, unfortunately,” said the executive director of Bodiva, Odair Costa.

According to him, through this market, companies will be able to capitalize by issuing debt or capital instruments, commonly known as shares.

With this segment, Bodiva promises to make available to investors another class of shares of companies in a growth phase and with a high potential for appreciation.

To launch this market, he explained, “it was necessary to make the requirements for admission to trading more flexible so that they could be adapted to the reality of Angolan SMEs”.

“Bodiva will serve as a platform to finance the expansion of SMEs,” said Odair Costa, speaking at the ceremony to present the “SME Segment”.

“We are certain that we can count on the support of entrepreneurs in the implementation of this initiative, which will certainly bring to the country a more inclusive dynamic about the capital market, and in particular the stock exchange,” he stressed.

All small and medium companies are eligible for the “PME’s Segment”, according to the classification of the National Institute of Support to Micro, Small and Medium Companies (Inapem), with accounts audited by an accounting expert for at least one year, business plan for three years and that disclose financial information annually.

Questioned by Lusa about the limit of financing via the stock market to SMEs, Odair Costa said there are no limits: “It will depend from company to company and market appetite; there is no minimum or maximum limit”.

Concerning the limit of companies that can join this segment, he added that the Angolan stock exchange “does not impose a minimum or maximum limit” but aims in the medium and long term for between five and ten companies.

Access to financing, electricity and water, competition from informal businesses, transport of goods, and access to obtaining raw materials are some of the “enormous constraints” that, according to Bodiva, SMEs in Angola face in carrying out their activities.

For Bodiva, access to long-term financing with no commitment to remuneration, tax benefits, corporate reputation, monetization of investment, cost of capital, which tends to be lower than traditional forms of financing, flexibility, shareholder structure, and attractive taxation are some of the benefits of stock market financing.