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Firms underultilising debt market—MSE

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John Kamanga

The Malawi Stock Exchange (MSE) has said private sector firms are underutilising debt market platforms put in place to help businesses raise capital.

MSE Chief Executive Officer John Kamanga was speaking in Mangochi on Friday when he presented a paper titled ‘The Stock Market: Fostering Resilience and Sustainable Development’, during the 2021 Financial Market Dealers Association annual conference.

Kamanga said, while government has raised about K929 billion through the debt market, the absorption level from the private sector has been at a meagre K12.4 billion.

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Kamanga attributed the development to a number of factors including fear of the unknown on the part of family businesses and lack of knowledge on the part of State-owned enterprises.

“Most of the companies are afraid to come to the stock market based on fears regarding corporate governance. One of the key parameters that we, as a stock market, promote is embracing corporate governance,” Kamanga said.

He added that, through the Business to Business clinics they have had, they have also come to understand that most of the State-owned enterprises are not aware of the debt market platform.

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“The government has been a trailblazer in terms of trying to show the path that they are able to go to the market and raise funds.

“The government itself has raised K929 billion through the market. That is a lot of money. We have played our part and we will continue sensitising the general public in terms of the role we can play in resource mobilisation,” Kamanga said.

Malawi Confederation of Chambers of Commerce and Industry Director of Business Environment and Policy Advocacy Madalitso Kazembe was not immideately available for comment yesterday.

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