African Stock Exchanges Urged to Open Doors for Small Businesses Seeking Growth Capital

By Taifa Leo Staff Writer

Kasuku David 

African securities exchanges have been challenged to make capital markets more accessible to small businesses, offering them an alternative source of financing to expand operations, create jobs and compete in regional and international markets.

Principal Secretary for MSMEs Development Susan Auma Mang’eni said stronger partnerships between governments, business organisations and capital market institutions were necessary to help micro, small and medium enterprises (MSMEs) overcome financing barriers that often limit their growth.

Speaking during the opening of the Africa Commerce & Industry Summit (ACIS) 2026 at Uhuru Gardens in Nairobi on Wednesday, October 14,

Ms Mang’eni urged securities exchanges to go beyond traditional listing services and actively prepare small businesses to attract investment.

She said MSMEs remained central to Africa’s economic development, supporting livelihoods and providing employment opportunities, particularly for young people and women.

However, limited access to affordable financing continues to prevent many enterprises from investing in modern technology, increasing production, expanding into new markets and creating more jobs.

“Preparing enterprises for stock exchange listings and other capital market instruments would open new pathways to sustainable financing, business expansion and job creation,” Ms Mang’eni said.

Unlocking capital market opportunities

For small businesses, accessing the stock market could provide an opportunity to raise substantial capital without relying entirely on bank loans or personal savings.

Through suitable capital market instruments, qualifying enterprises can raise funds from investors to purchase equipment, establish new branches, improve production capacity or finance expansion into other counties and countries.

One option is to sell shares to investors, allowing a business to raise equity capital without taking on the repayment obligations associated with a conventional loan. In return, investors acquire an ownership stake and may benefit from future dividends or an increase in the value of their shares.

Businesses can also explore bonds or other debt securities, where eligible issuers borrow money from investors and repay it according to agreed terms. Unlike equity financing, debt instruments require repayment and may involve interest costs.

Another potential benefit is improved business credibility. Preparing for capital market participation can encourage enterprises to strengthen financial reporting, corporate governance, record-keeping and accountability, making it easier to attract investors, lenders and business partners.

Access to a wider pool of investors could also help successful enterprises finance long-term projects that might otherwise be difficult to fund through short-term borrowing.

However, capital market financing is not automatic. Businesses must meet the relevant regulatory and market requirements, demonstrate sound financial management and assess the costs involved. For smaller enterprises, support through training, advisory services and appropriate financing platforms would be essential.

Youth and women-led enterprises

Ms Mang’eni challenged the organisers of the three-day summit to prioritise youth- and women-led enterprises, saying their participation was vital to building an inclusive and competitive economy.

She noted that Kenya faces an annual demand for approximately 1.2 million jobs, with MSMEs expected to contribute at least 70 per cent of the opportunities.

Expanding access to finance could enable enterprises owned by young people and women to move beyond small-scale operations, invest in new products and services, reach wider markets and employ more workers.

The PS said securities exchanges should help businesses strengthen corporate governance, embrace innovation and improve productivity to prepare them for investment opportunities.

She also reaffirmed the State Department’s commitment to working with the Kenya National Chamber of Commerce and Industry (KNCCI), which is marking its 60th anniversary, to strengthen enterprise capacity, expand market access and improve the competitiveness of Kenyan businesses.

The summit, hosted by KNCCI, brings together stakeholders in commerce and industry to explore opportunities for business growth and stronger economic cooperation.

Ms Mang’eni said sustained partnerships between the government, business membership organisations and capital market institutions would be essential to transforming MSMEs into productive, investment-ready enterprises capable of creating decent jobs and strengthening Africa’s position in global commerce.

For Kenya’s small businesses, the challenge is not only securing capital but also building enterprises strong enough to use that financing productively. Greater access to capital markets, supported by appropriate investor protections and practical business advisory services, could help more enterprises move from survival to sustainable growth.