EGM to provide new source of funding

THE Enterprise Growth Market (EGM) is expected to bring healthy competition in long term financing by providing an alternative source of funding for SMEs and new firms.

This is because commercial banks have been offering stringent conditions for lending which most SMEs and new firms lack, while interest rates are beyond the reach of the said companies.

According to the Deputy Permanent Secretary at Treasury Dr Servacius Likwelile the commercial banks have not been able to adequately address the funding needs of start-up and SMEs segment.

“Most of the banks are afraid to risk and are somehow conservative in their lending policies, especially to the informal sector and to the SMEs”, said the deputy PS in his remarks after he officially closed the first Securities Industry Certification Course over the weekend in Dar es Salaam.

He added: “While access to short-term loans, overdraft or trade financing have become more accessible, long-term loans are still tied to very stringent collateral requirements as well as high medium and long term interest rates.”

The objectives of the course, organised by Capital Markets and Securities Authorities (CMSA), were to train market players and professionals to acquire knowledge and practical skills to keep pace with the market demands.

Dr Likwelile noted that EGM is expected to bring new dynamism and vibrancy to the equity market through an increase in issuances and listings and translate into more choices in investment opportunities and investment incomes for investors.

This should in turn promote saving culture on the part of Tanzanians, channelling the savings into productive sector and thus contribute positively to the growth of the economy and formalisation of businesses, said the deputy PS
Source: The Daily News, www.dailynews.co.tz, reported by Ashery Mkama in Dar es Salaam
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