THE Zimbabwe Stock Exchange (ZSE) Holdings, grappling with a steady stream of companies delisting from its main board, has unveiled plans for a new trading platform — the Zimbabwe Entrepreneurship Exchange (ZEEX). Targeted at smaller enterprises with valuations from as low as US$250 000, ZEEX aims to open capital markets to the country’s largely overlooked small business sector, which accounts for 76,1% of Zimbabwe’s 204 798 registered establishments, according to official data. In this interview, our business reporter Blessed Ndlovu (BN) speaks to ZSE group chief executive officer Justin Bgoni (JB), about how the new bourse will work and what it means for local entrepreneurs. Below are excerpts of the interview:
BN: I understand you have a new project proposal that is tailor-made for small and medium enterprises (SMEs). Can you tell us more about it?
JB: The Zimbabwe Entrepreneurship Exchange (ZEEX) is an initiative being spearheaded by ZSE Holdings to address several challenges faced by various companies, including barriers to entry for smaller enterprises, limited access to capital for early-stage companies, and the concentration of listings among a few large corporations. The proposed framework aims to enhance accessibility, liquidity, and investor inclusivity.
The key incentives that have been proposed for ZEEX include a lower capital raise threshold with a tiered structure, the introduction of liquidity mechanisms such as designated market makers and a ZEEX SME Fund, enabling retail investor participation through Collective Investment Schemes and crowdfunding, and other supportive measures, such as simplified disclosures and tax enhancements. Overall, these align ZEEX with best practices from regional and global SME platforms to make it more inclusive and competitive.
BN: What is the rationale for establishing ZEEX?
JB: The main objectives for the establishment of ZEEX is to enable broader formal participation by businesses that represent a significant yet untapped segment of the economy, thereby formalising a market segment that constitutes a substantial percentage of national economic activity. ZEEX will improve access to finance for Entrepreneurs and Small and Medium-Sized Enterprises (SMEs).
BN: How will ZEEX differentiate itself from other stock exchanges such as ZSE and VFEX?
JB: ZEEX will target businesses that are typically excluded from traditional exchanges due to high listing thresholds and complex regulatory demands. It will include a tiered market structure, lighter governance requirements, and retail investor channels such as crowdfunding and Collective Investment Schemes (CIS). It will also promote liquidity through market makers, call auctions, and a dedicated SME Fund.
- Diamond mining in Zimbabwe: A story of the people fighting state and corporate human rights abuses and their stranglehold on natural resources
- UZ students arrested for demanding political reforms
- Harare woman suffers victimisation
- Banks agree to scrap charges
Keep Reading
BN: Can you describe how the respective markets on ZEEX will be structured?
JB: The ZEEX proposed structure will have two principal components, comprised of Private Markets and Public Markets:
l Part A — ZEEX Private Markets: A capital-raising platform where Issuers raise funds from qualified investors without a listing or secondary market trading; and
l Part B — ZEEX Public Markets: A listing and trading platform providing Entrepreneurs and SMEs with access to secondary market liquidity and requiring ongoing disclosure and governance.
This dual structure allows ZEEX to serve both early-stage fundraising needs and more advanced SME listings while maintaining appropriate regulatory safeguards.
BN: What are the proposed listing tiers on ZEEX in terms of minimum capital requirements, and what is the rationale behind them?
JB: ZEEX will include a three-tier structure, designed to accommodate entrepreneurs and SMEs at their various stages of growth: Tier 1 (micro-SME) — US$50 000 to US$250 000, Tier 2 (growth SME): US$ 250 000 TO US$1 million and Tier 3 (scale-up): US$1 million and above. The proposed structure will lower barriers to entry, foster inclusivity, and allow businesses to scale progressively through the capital markets.
BN: What instruments will be issued on ZEEX?
JB: The platform will allow issuers (listed companies) to raise capital through various instruments, such as equity (ordinary shares), fixed income securities (debt), and real estate investment trusts (REITs).
BN: What will be the structure of the secondary market on ZEEX?
JB: The secondary market enables investors to trade securities after they are listed. The ZEEX platform will have capabilities for instant settlement of trades. This reduces the risk that one party defaults or fails to fulfil their obligations under the transaction.
BN: What mechanisms will be put in place to enhance liquidity on ZEEX?
JB: ZEEX is set to introduce various initiatives aimed at boosting liquidity-designated market makers (DMMs) to provide continuous bid-ask quotes, the ZEEX SME Fund, anchored by institutional investors to support demand and incentives such as reduced levies and capital gains tax (CGT) benefits for investors
BN: Can you explain the role of designated market makers (DMMs) in the proposed liquidity enhancements?
JB: DMMs will be licensed brokers or investment firms obligated to provide continuous buy and sell quotes for ZEEX-listed companies, ensuring smoother trading. They will be incentivised through tax or fee rebates to maintain market depth and reduce volatility.
BN: What is the ZEEX SME Fund, and who would support it?
JB: The ZEEX SME Fund will be a pooled fund designed to anchor entrepreneurs and SMEs’ initial public offerings (IPOs) and boost secondary market liquidity. It will be supported by institutional investors such as pension funds, development finance institutions (DFIs), and donor agencies to provide stable capital inflows.
BN: Who can participate as investors on ZEEX?
JB: ZEEX is open to a wide range of investors, including: qualified institutional investors, such as pension funds and insurance firms, high net worth individuals, retail investors seeking returns on secondary market trading for listed companies and foreign investors who have an appetite for local investment opportunities.
BN: How will ZEEX enhance the participation of retail investors?
JB: The platform proposes the following options for retailers to participate:
Collective investment schemes (CIS) which allows asset managers to establish SME-focused funds or ZEEX ETFs to channel retail capital and crowdfunding module that introduces a regulated equity/debt crowdfunding option within ZEEX, permitting retail investors to participate in raises up to capped amounts (for example, US$ 500 to US$2 000 per raise).
The third platform is investor education - expanding ZEEX financial literacy courses to retail investors, ensuring informed participation. This will safely integrate retail investors while broadening the investor base and deepening market participation.
BN: What are the proposed listing requirements for admission on ZEEX?
JB: To list on ZEEX, a company will have to meet the following criteria:
l Have been in operation for at least one year;
l Provide at least one year of audited financial statements;
l Maintain a minimum public float of 10%;
l Have at least 20 shareholders; and
l Comply with light-touch corporate governance, including an audit committee and director induction programmes.
BN: How will ZEEX manage the risk associated with the SME sector?
JB: ZEEX will implement the following strategies; restricting access to certain high-risk investments to qualified investors, providing governance and compliance training to all potential Issuers, utilising secure digital trading platforms, offering incubation under the PITP (Prospective Issuers Training Programme), which provides structured onboarding and mentorship for potential issuers
BN: How will capital-raising costs be treated for tax purposes?
JB: We propose that capital-raising expenses for listing on ZEEX be 100% tax-deductible, thereby reducing the financial burden on SMEs and encouraging their participation in the formal capital markets.
BN: Are there any investor protection measures on ZEEX?
JB: Investor protection will be ensured through: The regulatory oversight by the Securities and Exchange Commission of Zimbabwe (SecZim), the three-tiered access restrictions for high-risk investments, financial literacy and investor education programmes, and governance and disclosure requirements for Issuers prescribed in the listing rules.
BN: How will ZEEX contribute to economic growth?
JB: ZEEX fosters inclusive financial development by bringing entrepreneurs and SMEs into the formal economy, improving their access to funding, encouraging innovation, and supporting job creation. It will also help deepen capital markets, enhancing Zimbabwe’s financial ecosystem.
