MICROFINANCIER Untu Capital has begun raising the outstanding tranche of US$4 million from the cumulative US$5 million it intends to raise through the issuance of tradable bonds on the Financial Securities Exchange (Finsec) Alternative Trading Platform.
By Tinashe Kairiza
Initially, Untu Capital announced that it was targeting to first raise US$1 million from trading the bonds, while it would embark on generating US$4 million in equal tranches of US$2 million, over two phases.
Floating the mobile bonds on Finsec is meant to drive the growth potential of small and medium enterprises (SMEs), among other financially excluded groups.
The bonds, which are called U-Gain, are now tradable via various mobile platforms and can be accessed for US$50 by subscribers.
This week, Untu Capital partnered EcoCash to allow the public to access the tradable bonds through the mobile platform.
Untu Capital is targeting to raise US$5 million in three tranches, with the first tranche of US$1 million earmarked for the retail sector.
Trading the bonds through mobile platforms is meant to broaden the public’s access to the financial service.
Finsec general manager Garikayi Munema said after successfully raising the initial target of US$1 million, work had “already started” to generate the outstanding US$4 million, in equal tranches of US$2 million.
“The dates that have officially been communicated to us are for the first tranche (US$1 million) only.
“However, we are aware that work around the second and third tranches has already commenced,” said Munema.
He said the bond offer would allow Zimbabwe’s start-ups and SMEs, which have been struggling to access lines of fresh investment capital for expansion projects, to access the money market.
“Untu Capital aims to raise US$ 1 million during the offer period from the first tranche of the bond starting in December 2017. This offer will be open to individuals, small business, corporates and other institutional investors. There will be two subsequent tranches of US$2m each all adding up to US$5m for the whole programme,” said Munema, noting that the “offer had generated a surprise response from subscribers of the mobile network operators who have been registering in their thousands.”
Through EcoCash, subscribers have the option to trade the U-Gain bonds on the Financial Securities Exchange, and dispose them before the expiry of 12 months.