Emerging markets should focus on SMEs, says SEC director » SMEInsider

Emerging markets should focus on SMEs, says SEC director

The director general of the Securities and Exchange Commission (SEC) has advised governments in the emerging economies to focus more on the development of small and medium sized businesses.

Arunma Oteh sees this as the most efficient way for these economies to create more jobs and improve the standards of living for their citizens.

Oteh spoke on the sidelines of the International Organisation of Securities Commissions (IOSCO) annual meeting in Rio de Janeiro, Brazil. She noted that SMEs are vehicles for wealth creation which could in turn improve the economies of many countries.

“I think that there is the recognition globally about the importance of SMEs because they are the ones who create jobs,” Oteh said. “I think there is a greater focus on how SMEs can be supported.”

But to continue to grow these SMEs, the SEC boss said she believes that the capital markets are an absolutely important solution to source funds among other other natives.

“We need to provide funding at reasonable cost. Capital that is patient so that people can grow their businesses, and banking finance is not patient. It is short term, particularly in Africa and Middle East where the interest rates are relatively high.”

Many discussions at the conference surrounded the necessity of listing SMEs, and allowing adequate support while doing so. Oteh referenced Johannesburg as a model, where advisers nurture and guide SMEs through the process of listing on – and staying on – an exchange.

“In Egypt you have a dedicated exchange for SMEs, the Nile Exchange,” Oteh noted. The SEC boss also said that crowd funding was an interesting step forward for SMEs in emerging markets, as in a number of countries this practice is allowing SMEs to fund themselves without the need for loans.