Regional capital markets regulators, under the umbrella of East African Securities Regulatory Authorities (EASRA), have agreed to support the establishment of a Capital Markets Advisory Centre (CMAC) to enhance access to capital for small-and-medium enterprises (SMEs).

According to a statement from EASRA, the centre is expected to provide technical support to SMEs with a view to developing a credible pipeline of entities able to access private and public market-based finance. Once established, the institution’s support is expected to focus on pre-listing, listing and post-listing support services.

To ensure the sustainability of the institution, EASRA members will engage private equity, accounting and other associations, development partners, academia, think tanks, and civil society organisations, the statement added. Partners will be called upon to provide advocacy and technical support.

Rwanda’s Capital Market Authority executive director, Robert Mathu, attended the meeting.

The regional security exchanges’ chiefs said the decision to set up CMAC was made with the recognition that SMEs need to be supported to access alternative forms of long-term capital, thereby reducing their dependence on short-term bank financing in order to spur their growth and boost employment creation. "However, most SMEs in the region cannot afford technical services like legal and corporate restructuring,” they noted in the statement.

Way forward

Meanwhile, during the consultative committee meeting, the regulators also deliberated on full implementation of risk-based supervision; regional capacity building programmes through partnership with the Chartered Institute for Securities and Investment to ensure certification of industry players, and development of case studies to facilitate capacity-building among regulators.

The regional capital markets chiefs also discussed ways of ensuring regulatory and market infrastructure responsiveness to technological changes, especially in the fintech (financial technology) space, as well as crisis management in the EAC capital markets; and emerging issues in regulatory risk management.

The consultative committee further noted the positive progress being made toward harmonisation of the legal and regulatory framework for capital markets in the EAC.

EASRA vowed to maintain support to member states in the area of capacity building until they are all at an equal level to support a single EAC investment destination for global investors.