Associations spearheading micro, small and medium-sized enterprises (MSMEs) locally have said that they are in full support of the establishment of a micro market on the local stock exchange.

“With all the challenges that we currently have with financing, I think it is an excellent idea. The idea supported by Minister Shaw when he was head of the ministry, is still very much on the table but for some reason has not taken roots,” said Donovan Wignall, president of the MSME Alliance — a network of business organisations which represents more than 300,000 MSMEs locally.

Speaking at last month’s edition of the Jamaica Observer Business Forum, Wignall said that while much talk has been and is still being done at the larger private sector level, the respective groups, comprising his organisation along with the efforts of the Small Business Association of Jamaica (SBAJ) and the Young Entrepreneurs Association (YEA), among other bodies, would in short order be moving to start discussions with Marlene Street Forrest, managing director of the Jamaica Stock Exchange (JSE).

“Through these discussions we will look to see how we can execute the programme of a micro stock exchange. We can set a limit of probably $50 million-$100 million as a cap for the initial public offer (IPO) for micro businesses, but I believe it is an excellent idea worth pursuing,” he stated.

“If we look at the example of the junior stock exchange and the amount of companies that became listed, as well as the improvement of corporate governance in those companies, it would really auger well for micro companies, especially for the purposes of formalisation,” Wignall added.

Following the creation of a junior market in 2009, which to date accounts for almost half of the over 100 securities now listed on the JSE, a micro exchange is expected to further allow smaller companies earning revenues below $15 million to raise equity to jump-start business growth.

The junior market already allows fully registered and legimate SMEs the opportunity to raise between $50 million to $500 million in new funds from an IPO. Incentives including a full income tax holiday for the first five years and at 50 per cent for the remaining five are also applied.

YEA President Cordell Williams Graham, also throwing full support behind the development of a micro market, said that aside from formalisation and corporate governance structures, the creation of such a market will allow smaller players in the business community to benefit from diverse funding.

“I think it is a good move as well, providing a significant boost for formality because of the requirements,” she said during the forum.

Minister Audley Shaw, who has long championed the need for a micro market and was instrumental in the creation of the junior market, just recently at a JSE listing ceremony stressed the need for definitive action to be taken in getting things started, noting that a micro stock exchange “will present another opportunity for more businesses to become formal”.

Shaw also in his earlier proposals had said that a micro exchange would target companies for capitalisation between $5 million and $50 million, as they seek funds to support growth and expansion.

“I’ll be arguing for it and promoting it at Cabinet with the prime minister and the minister of finance,” he stated.