NSE CEO talks strategy, listings outlook & support for MSME growth
Given the recent successful launch of the Ksh3 billion Islamic Linzi Sukuk bond on the Nairobi Securities Exchange, the bourse is strategically positioning itself as a pivotal player in the region’s financial landscape by broadening its array of funding options and reinforcing its commitment to Micro, Small and Medium Enterprises (MSMEs). CNBC Africa had an exclusive sit down with the CEO, Frank Mwiti for more.
Wed, 07 Aug 2024 15:00:43 GMT
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AI Generated Summary
- The successful launch of the Islamic Linzi Sukuk bond with a competitive IRR showcases the potential for alternative financing to reduce borrowing costs and attract international capital sources.
- By engaging with diverse markets and exploring blended finance models, the NSE aims to lower the cost of capital and enhance competitiveness for businesses, projects, and government initiatives.
- Initiatives such as investor education, cross-listings with other African exchanges, and advancements in blockchain technology demonstrate the NSE's commitment to driving market evolution and fostering a vibrant capital markets ecosystem.
The Nairobi Securities Exchange (NSE) is making strategic moves to solidify its position as a key player in the region's financial sector. With the recent successful launch of the Ksh3 billion Islamic Linzi Sukuk bond, the NSE is expanding its funding options and showcasing its dedication to supporting Micro, Small, and Medium Enterprises (MSMEs). In an exclusive interview with CNBC Africa, NSE CEO Frank Mwiti provided insights into the exchange's innovative financial strategies and outlined the path towards sustainable growth and development. The Sukuk bond, with a relatively low IRR of just over 11.2% compared to higher rates for treasury bonds, demonstrates the potential for alternative financing to reduce borrowing costs and attract diverse capital sources. Mwiti highlighted the NSE's efforts to leverage Islamic finance and engage international markets such as the Middle East, Malaysia, and Indonesia to tap into pools of capital aligned with Islamic principles. Additionally, discussions with development finance institutions are exploring blended finance models to lower the overall cost of capital and enhance competitiveness for businesses and government projects. By pioneering new financial instruments and fostering collaborations with global partners, the NSE aims to set a precedent for financial innovation in the region. Looking ahead, the exchange envisions opportunities for cross-listings with other African exchanges, initiatives for investor education, and advancements in blockchain technology to drive market evolution and create a conducive environment for sustainable growth. While crypto regulation remains a topic of interest, the NSE is focused on exploring blockchain solutions and ensuring compliance with evolving digital asset regulations. The exchange's commitment to supporting MSMEs is evident through programs such as Ibuka for investor readiness and NSE Connect for working capital access. The NSE also facilitates liquidity for middle market entities through the Unquoted Securities Platform, with plans for a listed SME debt fund to provide local currency debt facilities for qualified MSMEs and intermediaries. By championing inclusive financial solutions and embracing market-driven innovations, the NSE is poised to play a pivotal role in driving economic development and fostering a vibrant capital markets ecosystem.
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