The Nepal Securities Board (SEBON) is planning to launch a separate SME board to help startups and small and medium-sized enterprises (SMEs) raise capital easily through the capital market.
The capital market policy for the fiscal year 2083/84 aims to develop a new financial system. This system will provide risk capital to entrepreneurial ventures, moving away from their current heavy reliance on bank loans.
According to SEBON, small companies listing on the new SME board will need to meet simpler standards compared to the main board. The rules for listing, information disclosure, and regulatory compliance will also be made easier to suit the needs of small businesses. There will be a system in place for successful companies to move to the main trading board (known as Graduated Listing) once they meet certain set criteria.
Beyond traditional share issuance, the policy proposes to provide early-stage capital to startups in sectors like information technology, agriculture, and tourism through private equity and venture capital. For the first time in Nepal, a feasibility study will be conducted for Equity Crowdfunding to set up its legal and regulatory framework. This initiative expects giving entrepreneurs the chance to raise direct equity investment from the general public.
To prepare startups and SMEs for the capital market, SEBON also plans encouraging business consulting services, corporate governance improvements, financial reporting, and transparency programs. The policy also includes working with universities, research institutions, and incubation centers to connect students and innovation-based startups with the capital market. Furthermore, special programs will be run to increase access to the capital market for enterprises led by young people and women.
The action plan for implementing this policy includes recommending tax exemptions for companies listed on the SME board and measures to reduce the cost of issuing shares and debentures. It also involves expanding research and analysis (Research Coverage) for SME companies. The board believe this will provide investors with reliable information about small companies and increase investment in the SME market.
AI Disclaimer: This article was originally published on https://bajarkochirfar.com. It has been translated with the help of AI. For the best understanding and accurate facts, we recommend reading the original Nepali version.
