Local corporations can attract investors and secure long term funding at lower costs by embracing good governance policies and practices, financial experts have said.

Experts say that by having good corporate governance practices, local firms will have increased access to capital at better rates due to increased investor confidence.

This comes at a time when a number of firms in the country are turning to capital markets to seek long term affordable funding.

They were speaking at a breakfast meeting themed "Corporate Governance; the pathway to sustainable business growth in Rwanda” on Wednesday in Kigali.

It was organised by the Capital Market Authority (CMA) in partnership with International Finance Corporation (IFC), a member of the World Bank Group to raise awareness on issues related to Corporate Governance as a sustainable driver of business growth.

International Finance Corporation Country Representative Ignace Bacyaha said that though good corporate governance is required in all sectors it is of key importance in financial institutions.

"The financial sector plays the central role of intermediating savings and allocating capital in the economy. Firms in the financial sector are key players in creating market disciplines favouring better standards in the corporate sector more generally,” he said.

Better practices increase market confidence thereby opening the sectors up for investments by local and international investors thereby making it cheap to access capital.

The Executive Director of Capital Market Authority (CMA), Robert Mathu said that with companies in the country exploring capital markets as a source of long-term finance a pre-condition is confidence among investors.

"A key prerequisite to access capital from public markets is to adopt and internalise corporate governance practices to instill confidence among investors. In Rwanda the Capital Markets Authority (CMA) together with other organisations have been at the forefront of ensuring good governance especially for companies listed at the Rwanda Stock Exchange,” he said.

Auditor General, Obadiah Biraro said that corporations that operate efficiently tend to allocate and manage resources more sustainably while better stakeholder relationships help companies address environmental protection, social and labor issues.

Among the good corporate practices he emphasised include fairness, transparency and accountability.

"Improved corporate governance practices increase access to markets and lower the cost of capital, which encourage new investments, boosts economic growth, and provide employment opportunities,” he said.

Corporate governance was also highlighted as a way to eradicate vulnerability of clients and financial crisis within financial institutions.

Capital markets Authority in September entered into an agreement with the Chartered Institute for Securities and Investment (CISI) on the implementation of a qualifications- led licensing programme for the capital markets.

The agreement sought to enhance professionalism and promote development of capital markets in Rwanda to boost ethical standards, integrity and professionalism of the industry across the region.

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