In 2019, NCB Capital Markets (NCBCM) had announced the waiving of arranger and broker fees for qualified small and medium sized enterprise (SME) clients who were seeking to list their companies on the Jamaica Stock Exchange (JSE) Junior Market. This initiative would see NCBCM providing various services such as arranger, advisory and valuation to these SME clients in preparing them for listing on the exchange.

Since the launch, NCBCM has listed two companies under this initiative and has a number of other prospects and mandates in the pipeline.

“The launch of the no-arranger fees initiative, although being successful so far, was one plank of a holistic approach that we deemed necessary if we were going to really assist our SMEs in not just listing, but to unravel their growth potential,” stated Vice-President of Investment Banking Herbert Hall.

NCBCM has taken the initiative to another level since then by commencing work on an eco-system that would support and be sensitive to the uniqueness of the SME clients who were seeking to list, or had intentions of listing within the next few years.

The ecosystem needed to have the requisite professionals to provide the services need prior to and post listing such as auditing, legal, accounting and mentoring.

“With all these services that are needed for a successful initial public offering (IPO), one of the main things that we had to be cognisant of, is the fact that SMEs by their very nature are extremely cost sensitive and doing an IPO could prove to be intimidating from a cost perspective,” Hall explained.

NCBCM has been working to ensure that the professionals to be engaged are willing to reduce their usual fees and/or forego their fees in exchange for shares in the company. That way, the direct cost to the client is minimised and there is value being added to a client being a part of the ecosystem.

The company has been able to on-board a panel of lawyers who have worked with them on various transactions and who have committed to not only bringing value to the SMEs, but also have vested interest in their success. Business consultants, who are not only versed in assessing business and skills gaps, but also experts in governance and governance related issues, are also a part of the ecosystem.

Through NCBCM’s partnership the JSE, SMEs will also have reach to a network of business mentors who have been vetted by the JSE.

According to Hall, the list of professionals is not exhaustive or closed and they continually seek partners to expand the ecosystem. This, in the company’s view, will only redound to the benefit of the SME sector and, by extension the rest of Jamaica.

— Alexis Monteith