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Innovation, long-term investments offering companies opportunities amid pandemic – CMA

NAIROBI, Kenya, Aug 12 – Coronavirus has forced companies both locally and globally to rethink how business is done. Despite many companies making heavy losses due to the impact of the pandemic, a new report by the Capital Markets Authority reveals unique opportunities available in the market.  

In the Capital Markets Soundness Report for the second quarter of the year, CMA argues that opportunities are companies are willing to become innovative.  

The report encourages Kenyan companies to make use of crowdfunding platforms to raise funds for financing various projects.  

Through these platforms, investors can channel funds in approved initiatives. 

 “The pandemic has necessitated adoption of technology due to urgent financing needs in various industries,” CMA says in the report.  

The emergence of long-term opportunities has also been brought to the fore by the pandemic.  

Using the government’s ‘buy Kenya Build Kenya’ as an example, CMA says the initiative has encouraged Kenyan business to manufacture health related products. 

“The management anticipates a situation where manufactures in the health sector will require huge funds for production and expansion. The capital markets industry offers a perfect opportunity where these firms can raise longterm funds through issuance of corporate bonds.” 

The report also notes a rise of Financial Technology (Fintech) innovation and social engagement platforms since the emergence of the virus.  

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According to CMA, the Covid-19 pandemic has led to the emergence of various forms of fintech business aiming to provide online services such as virtual meetings and chat platforms.  

Kenya being the technology hub in Sub-Saharan Africa which championed mobile money innovative products such as MPesa will be part of the world in development of innovative mobile money products. 

Capital markets innovative systems can be admitted at the CMA’s sandbox for testing before they are launched for general consumption.  

The Authority can consider establishing a less stringent listing platform specifically for fintech capital raising. 

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