This archive report was first published on 22 June 2020.
Kenya's bid to have small and medium-sized enterprises raise fresh capital through the Nairobi Securities Exchange has hit a snag due to the Covid-19 pandemic.
According to sources, the NSE has not attracted a single company in close to a decade, and its incubation programme, dubbed 'Ibuka', is struggling to attract new participants.
Launched in December 2018, Ibuka was designed to help selected Kenyan companies fast-track their development process by accessing financial advisers and consultants to help them structure their businesses, enhance visibility, and get exposure to local and international investors.
So far, 24 firms have enrolled in the programme, but new enrolment has stalled over the past three months due to the pandemic, which has negatively affected the financial positions of several firms through declining sales and productivity.
'These companies have made good progress, but Covid-19 has slowed everything down,' said Geoffrey Odundo, the bourse's chief executive.
Paul Mwai, Kasib chairman, added that several firms that had wished to join the programme are on a wait-and-see due to the pandemic.
Financial services firm Britam was the last corporate entity to issue shares to the public through the NSE, raising Ksh3.5 billion ($35 million) in August 2011, 40 per cent under subscription.
Despite the challenges, Ibuka's chairman remains optimistic, saying the programme creates a good pipeline of companies that have the potential of listing in future.
However, the NSE 20-Share Index fell by 20.7 per cent during the quarter (January-March), with notable decline in prices of listed stocks in the tourism, transport, manufacturing, and agricultural sectors.
