Lusaka Securities Exchange (LuSE)

LuSE GEM portal

Background

Lusaka Securities Exchange (LuSE) is a registered Securities Exchange under the Securities Act No 41 of 2016. In March 2022, Lusaka Securities Exchange (LuSE) in partnership with the
Escrow Group officially launched the GEM Portal, a digital platform for the identification;
evaluation, capital raising and possible securities exchange listing of qualifying enterprises.

The major objectives of this solution include:

  • Deployment of the GEM Portal to assist enterprises raise capital and get access to
    investors through an efficient and convenient online platform;
  • To proactively identify and capacitate qualifying enterprises to ensure sustainable funding options;
  • To leverage on technology and ensure sustainability of the target enterprises;
    The Growth Enterprises Market (GEM) Portal and is an online portal that enables High Growth

Enterprises and SMEs as the target enterprises to:

  • Apply for debt or equity funding through an online application process;
  • Access to Designated Advisors for guidance through the capital application process;
  • Access more diverse funding options;
  • Enhance visibility of the applicant and their business model to multiple funders;

The Concept

A ready-made turnkey solution that allows the target enterprises to apply for capital by completing an online portal which portal scores each application and exposes the application to providers of capital and investors for investment consideration. The GEM Portal:

  • Enables applicant enterprises to apply for capital through an efficient and convenient
    online platform.
  • The platform presents funders and other investors with a list of pre-assessed enterprise
    applications
  • The platform provides information on the state of each application and assists the
    applicant in identifying any challenges with the application.
  • Funders/Investors will be able to cherry pick from the list of applicants based on their risk
    profile and other investment considerations.
  • The platform also allows funders/investors to track the performance of the enterprises
    they have invested in through the provision of regular performance and financial
    statistics.

How it Works

The GEM Portal is an Online portal that allows Small and Medium sized enterprises to apply for Equity or Debt funding by registering their company details and performance. It links MSMEs to Financiers with the aim of spurring their growth and development through Capacity building, technical assistance and Grants. This also gives the SME a gradual step-by-step process on ways to become a publicly listed entity.

Support Structures

The GEM Portal is accessible to all SMEs and High Growth Enterprises regardless of which stage in their lifecycle they are in. Some of the support mechanisms include:

Application Management
Applicants complete an online application process submitting the necessary information required which will feed in the scoring and rating mechanism. The application process has been deliberately made simple and convenient and applicants have the option is engaging financial advisors at any stage of the application process to assist and provide further guidance.

Scoring
The portal has an in-built scoring model which provides scores for each input (manual input by applicant, bank data input or mobile money data input). The data is displayed the form of a scorecard and can be used by Designated Advisors and qualified investors to ‘cherry pick’ an applicant for further analysis and investment consideration.

Types of Funding

A great feature of the solution is the availability of a diverse set of funding options which suit the targeted enterprises and their needs, the options are debt (short, medium or long term), equity funding: private offers which comprise private equity, pre-IPO finance and IPO finance and venture capital funds:

Debt Funding

This refer to borrowing by issuing debt instruments for those that may not want their business to be diluted. This includes short term, medium-term and long-term debt. Some debt instruments can be converted to equity depending on the agreed terms and conditions.

Equity funding

Raising capital by selling off part of the business stock to the public. This is one form of long-term financing and results in dilution of shareholding as more investors take up equity in the business.

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