Nairobi Securities Exchange launches growth board for SMEs

This week the Nairobi Securities Exchange ( has joined the rush into providing boards for small and medium enterprises (SMEs) with the launch on 22 January of the Growth Enterprise Market Segment (GEMS).
GEMS is designed to offer a regulatory and trading environment to meet the need of SMEs. The aim is that they can raise good amounts of initial and ongoing capital. They should also be able to boost their profile and enjoy more liquidity in their shares.
Chairman of NSE Eddy Njoroge said in a NSE press release: “The establishment of a GEMS market in Kenya will pave way for the listing of small and medium-sized enterprises on the exchange, which is a major driver of our country’s economy.” He also thanked the regulator for “showing commitment and support” in establishing GEMS. CEO Peter Mwangi added that the establishment of this market will become a fundamental contributor to the stability of Kenya’s overall financial system.
Kenya has a good community of experienced advisers to support companies who wish to list. The key intermediaries are the Nominated Advisors (NOMADs), who will assist companies to list on GEMS and to comply with good corporate governance and global best practices. Other professionals with background on GEMS include brokers, accountants and lawyers.
The NSE plans to offer a directors’ course on corporate governance to the directors of the “mid cap.” Companies, meaning those with middle ranges of market capitalization.
The NSE believes that SMEs are a key sector for achieving Kenya’s Vision 2030 and the United Nations Millennium Development Goals. Commenting during the launch,.
Eligibility criteria for companies wishing to list include: Being a registered public company; minimum fully paid-up capital of KES 10 million ($114,400); at least 100,000 shares in issue and free transferability of shares; adequate working capital and solvency; track record of operations for at least a year but no profitability record needed; 5 directors, of which a third should be non-executive; directors with no bankruptcy, fraud, criminal offence or financial misconduct proceedings for 2 years; competent board and senior management – at least 1 year experience in the business; A third of the board members must have completed Directors Induction Programme and the rest have to complete it within 6 months of listing; all issued shares to be immobilized; 15% of the shares must be available for trading & held by at least 25 independent shareholders within 3 months of listing; Controlling shareholders lock in for 24 months; NOMAD appointed by written contract.
The NSE is Kenya’s main securities exchange, offering listing and trading in equities and debt.

3 Responses to “Nairobi Securities Exchange launches growth board for SMEs”

  1. Rachel Kasumba

    Wise move on part of the capital markets to include SMEs. They will tap into the liquidity pool and I expect contribution from this sector to grow, because of reforms around the need to formalize the informal sector and more people are also setting up SMEs.

    This strategy is going to boost the capital markets and I can’t wait for the same to be applied in the rest of the East African Economy regional bloc.

  2. Tom Minney

    I have an article on this coming out in the ASEA newsletter I hope, a very interesting example from the experiences of AltX and the Stock Exchange of Mauritius, both of whom provided interesting and successful approaches to getting growth boards moving.

  3. Rachel Kasumba

    Great. I look forward to reading it. Thanks for keeping us informed.