The Nairobi Securities Exchange (NSE) launched an incubation and acceleration program called the Ibuka. Ibuka is a Swahili word meaning to emerge. The program seeks to embrace small and medium sized companies through a 10 month incubation period.
The program is designed around Hosting on non-trading boards; which are the Incubator Board and the Accelerator Board. The program will enable select Kenyan companies such as the Optiven Group, to fast-track its development by accessing financial advisors and consultants.
Other benefits to the corporate include assistance in terms of structuring businesses, enhancement of visibility through a selection of communication channels and provision of exposure to local and international investors. Companies can benefit from joining the Ibuka program by getting visibility and exposure. The program exposes companies to both local and international investors in the capital market.
The companies will gain credibility due to association with the NSE which is the largest securities Exchange in the region and one of the largest in Africa. The companies will also get expert advisory, through the consultant and advisors appointed to the incubation and accelerator boards.
The consultants/advisors will offer technical expert advisory services to the companies to help improve their structures. The roll out of IBUKA came as many small and medium enterprises (SMEs) — despite being the largest employers — experience difficulties attracting financing for expansion due to risk-aversion among potential financiers.
As a result, SMEs have been unable to grow or even qualify to meet the onerous requirements for listing on the NSE. The situation worsened after the tightening of regulations in the aftermath of the global financial crisis and the capping of interest rates in late 2016.
The announcement by Optiven Group to be a part of IBUKA was officially made on the 23rd of March 2021 by the Directors – George Wachiuri – interim Chief Executive, Mary Wachuka – interim General Manager and Charles Muraguri – interim Director of Projects respectively.
Through the decision, the company is expected to be officially onboarded to the Ibuka Program under the Accelerator board as players and stakeholders in Real Estate, Property Management, Hospitality and Construction. Speaking on the move to top managers serving under Optiven Group, CEO George Wachiuri said, ‘it is an exciting time for the Optiven Group as we stand to be game changers in this fields. I am confident that together we are going to compete at next level basis while achieving our key objective of working with the IBUKA team to enable us develop our capabilities. After 20 years we are confident too that our operations will signal a definite growth patterns to showcase the difference that we have had in the market”.
He added that such growth is important to absorb the myriad Kenyans looking for jobs and who are not able to find gainful employment. The statement by Wachiuri was made as a number of companies issued profit warnings to their shareholders and is a repeat of his sentiments shared on 16th January 2020 where he urged the government to support growing enterprises for the purpose of job creation, while speaking on NTV AMLive programme.
So how does the IBUKA program work?
Through the program, the hostee companies, – often companies accepted into the program – are accepted after a rigorous evaluation and vetting process making. This is done in two phases
The first is the incubation phase. This involves enhancing a company’s financial, technical, operational, commercial and strategic aspects of its businesses.
Known as the acceleration phase, it enables a company to raise capital through debt and equity market. The company is mandated to also track valuation as well as produce specialized documents such as capital raising and equity raising reports.
The IBUKA program which now has a total of 22 member companies. If successful, Optiven Group will be the 23rd member as the NSE targets to list their first firm from the IBUKA program. NSE chief executive Geoffrey Odundo says companies already in the program are at different stages of compliance as the program is helping the companies meet the required terms.
FACTS ABOUT IBUKA
It is an incubation and acceleration programme. IBUKA is a Swahili word which means emerge .It was launched in December in the year 2018. The initiative, intent is to prepare companies for listing on the main board of the bourse. The first company to enroll in IBUKA was APT Commodities, a tea exporting firm. The latest company to be registered was Mookah Africa, an online ticketing platform. As at 2021, IBUKA has 22 members of the programme
It intends to assist in
- inculcating improved corporate standards,
- develop capabilities to access capital markets
- provide a roadmap to long-term corporate sustainability
By Kate Khasoa-Kole