cat/small-ticket-equity
A broader assessment of the market for small business finance as a whole was recently published by the British Business Bank.
This report builds on that document to provide a fuller exploration of the issues facing small business equity finance markets.
An important challenge for financial markets is understanding how to best screen borrowers when allocating credit. Predicting borrower creditworthiness is understandably hard. Whether a person defaults on a loan is not just the result of a mechanical financial calculus but is also driven by the complexities and idiosyncrasies of human behavior.
To the surprise of many, angel investing is beginning to provide needed capital to early stage entrepreneurs in developing countries. These investors are willing to invest despite high political risk, confusing regulations and poor governance. Angel groups are investing in Ukraine, Egypt, Nigeria, Ghana and many other countries.
Private equity is historically a male-dominated field, and historically, Africa’s local industry has been no different.
“Management roles for women in private equity are low in Africa,” Cindy Valentine, a partner at King and Wood Mallesons and African private equity advisory veteran, told AFKInsider, “Asia has historically had the highest percentage of women in senior roles, with 11.8 percent … For Africa, the figure is 7.6 percent.”
However, the profile of African women executive in Africa’s PE space is slowly rising.
The European Union published a “green paper” on Building a Capital Markets Union for the broader European community. The ambitious goals are laudable but the challenge is high. The report states that in comparison to the United States, medium sized companies received five times more funding than in the EU. This is a profound problem and is indicative of a broken capital markets and equity culture. In presentation delivered in December of last year Dr. Christian Katz, CEO of Six Swiss Exchange, stated that Europe faces a funding gap of € 2 trillion by 2020 highlighting a challenge as equity markets are not good at funding SME’s. That is big.
Need less than $5 million to make your business dream a reality? Good luck with that! Banks regard startups as risky — unless you put your home up for collateral. A loan for growing your company? Not unless the bank thinks you can pay the monthly interest payments. And for most venture capitalists, a company raising less than $5 million isn’t worth their time.
The European Commission has laid out options for a capital markets union (CMU) it hopes will encourage schemes to invest in small and medium enterprises (SMEs) and infrastructure.
Date 12-13 February 2015
Location: Kigali, Rwanda
The Government of Rwanda and International Finance Corporation (IFC), a member of the World Bank Group, is hosting a high-level international conference on Capital Markets East Africa 2015: Accelerating Economic Development in Kigali, Rwanda, from February 12-13, 2015.
On the agenda will be capital market development in East Africa – opportunities and challenges – towards serving as foundations for long-term and inclusive economic growth.
he Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank Group (IDB), has recently approved a technical cooperation of US $563,750 for a project with the Jamaica Stock Exchange (JSE). The project will increase access to equity financing for Jamaican small and medium-sized enterprises (SMEs) by improving the framework of the JSE’s Junior Market and providing 25 SMEs with capacity-building so that they can meet the requirements for listing on the Junior Market.
The Singapore Exchange (SGX) is gearing up its efforts to support smaller firms and entrepreneurs here by establishing a partnership with venture capital Clearbridge Accelerator (CBA) to develop what they say is a one-of-its-kind equity crowdfunding platform in Asia.
The platform will allow entrepreneurs and small and medium enterprises (SMEs) to raise funds, while giving investors the opportunity to participate in the growth of these companies, SGX and CBA said yesterday.
