In a significant move for the capital market, the Pakistan Stock Exchange (PSX) and Karandaaz Pakistan (KRN) have inked a contract providing grants for technical help to potential companies that wish to list on the Growth Enterprise Market (GEM) Board. With the signing of this agreement, the PSX and KRN have teamed up to provide grants to qualified small- and medium-growth businesses in their pursuit of listing on the GEM Board.

PSX approached KRN in an effort to help small companies raise critically important financing for the expansion of their company. This was done in an effort to promote the GEM Board to qualified small and medium-sized enterprises (SMEs).The agreement was inked by Managing Director and Chief Executive Officer PSX, Farrukh H Khan, and Chief Executive Officer Karandaaz Pakistan (KRN) Waqas ul Hasan.

Speaking on the occasion, Farrukh Khan said that the programme - through which we are assisting and encouraging qualified small to medium-growth companies to list on PSX's GEM Board - will help to improve Pakistan's capital market.Given that cost plays a crucial role in the decision-making process for small businesses to list and obtain financing, this agreement starts the ball rolling for a grant to pay a portion of the listing expenses for five qualifying growth enterprises to list on the GEM Board,

Accordingly, this will lower the cost of raising capital for these enterprises, he explained, adding that the agreement is the result of a cooperative effort by PSX and KRN to help and encourage SMEs in their efforts to acquire finance and expand their operations by listing on the GEM Board.

According to him, the agreement's signing is a portent of things to come in terms of growth for the GEM Board, its listed firms, and the capital market as a whole.Karandaaz CEO Waqas ul Hasan emphasised the company's contribution to SME finance as well as the value of its relationship with PSX in opening financing options.

According to him, the goal of Karandaaz is to promote employment creation and financial inclusion for unbanked people and unserved businesses. Through different financial instruments, it has funded 850,613 micro, small, and medium-sized enterprises (MSMEs), supporting 1,006,930 jobs and generating an incremental PKR 199 billion in income for these MSMEs.

Speaking at the event,  Development Director at the British High Commission Jo Moir said that the UK government has been happy to support the initiative through Karandaaz and that the GEM project gave SMEs access to capital markets financing, allowing them to expand and reach their full potential.

Chairperson of KRN and PSX Dr. Shamshad Akhtar stated in her concluding remarks that PSX has succeeded over the past year in operationalising its GEM Board, as tested by the listing of a few companies. KRN has brought to PSX its unique edge and potential to unlock GEM challenges as it has developed a broad-based eco system and SME finance institutional architecture.

Moving forward, grant support from KRN to position enterprises for listing will open avenues for equity and debt, she said, adding "the listed companies would be elevated to an exclusive league within the SME segment that have demonstrated institutional maturity and ambition and prospects for growth."

Credit : Independent News Pakistan-WealthPk