The Rwanda Stock Exchange (RSE) has started receiving applications from small-and-medium enterprises (SMEs) that want to list on the alternative market segment of the bourse. 

Celestin Rwabukumba, co-ordinator of the RSE, said the process started last month, but did not disclose how many companies have already submitted applications.

He said the SME market segment, commonly known as alternative investment market, will enable small-and-medium companies raise money to expand their businesses.

The Ministry of Finance is optimistic the SME market segment will succeed.

According to a statement on the ministry’s website, access to finance is the major impediment curtailing SME growth. Small-and-medium businesses constitute 90 per cent of total businesses in the country and they are the biggest employer, it added. 

Rwabukumba said the SME market segment targets businesses such as restaurants, co-operatives, insurance firms, distribution businesses, transport companies and hotels. 

He revealed that the legal framework to establish and operate the SME market segment was already in place.

He said the framework limits the number of board members that an SME can appoint before listing on the bourse. He added that a third of the board will also be non-executive directors.

"Shareholders will elect the board members because they represent public interests,” Rwabukumba explained.

Also, unlike the Rwf500m capital requirement for any company to register on the main stock exchange, participants at the SME market segment will simply be required to disclose their prospectus. 

Rwabukumba said they were sensitising SMEs on the benefits of listing on the Rwanda Stock Exchange. 

The Rwanda Stock Exchange market recorded a total turnover of Rwf28.1b from 66 million shares traded compared to a total turnover of around Rwf7b from 45.2 million shares in the same period last year. This was an increase of over 301.4 per cent and 46 per cent in turnover and volume, respectively.

Recently, the RSE announced plans to issue municipal bonds in partnership with district councils as one of the ways to diversify products on the local bourse. It is aimed at helping local councils raise funds for community development projects.

Rwabukumba said some districts have already submitted project proposals as they prepare to issue municipal bonds.