Local startups looking to finance using equity might finally have a lifeline

We last wrote about the Growth Enterprise Market (GEM) back in March. At the time, FINSEC was formulating a draft framework for the online platform designed for SMEs looking to raise capital.

GEM then underwent a pilot phase in January which resulted in fine tuning of the GEM Portal platform based on feedback from targeted SMEs and other market participants.

During the pilot phase, 17 SMEs across various sectors; 2 leading fund managers; 4 nominated advisors; 2 commercial banks and 1 mobile money operator registered on the platform to play various respective roles in facilitating identification and funding of deserving high growth SMEs.

The GEM platform which has now been launched enables enterprises to apply for funding and possible listing online. According to FINSEC’s press release, the platform makes use of an algorithm to determine which SMEs qualify for funding;

GEM utilises alternative data analytics through integrations to financial services providers of the applicants and uses digital algorithms including inbuilt artificial intelligence capabilities to analyse, score and screen applicants for suitability of funding in real-time.

FINSEC says the platform also admits financiers who can register as Qualified Investors after demonstrating investment experience and understanding of investment risk.

It seems there’s been big shift from a few months ago when the government announced that the FINSEC would disburse ZW$500 million using the GEM . It seems the government’s funding will be replaced by;

  • Institutional Investors;
  • Fund Managers;
  • Corporates;
  • High Net-worth Individuals;
  • the Diaspora;
  • Foreign Investors and;
  • Development Finance Institutions

The funding and listing pathways available on the GEM market include short; medium and long-term debt; equity finance; restricted offers; pre-IPO placements; private placements leading to full IPO and listing in some cases.

Beyond that SMEs will also be able to get outside of financial assistance – with “incubation and accelerator services” being cited in FINSECs press release.


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