Two companies have applied to access the Listing Support Fund from the Ghana Stock Exchange (GSE) to enable them to list on the Ghana Alternative Exchange (GAX), otherwise known as the SME market.

Mr. Kofi Yamoah, Managing Director of the GSE told the B&FT that Processed Food and Spices and Meridian Marshall have applied to access the fund.

Intravenous Infusions Limited, a manufacturer of intravenous pharmaceutical infusions is also set to apply for support from fund.

The GSE, last year, set up a GH¢1million revolving fund to support the listing expenses of SMEs on the GAX.

The concept of the alternative market is to address complaints by SMEs about the stringent criteria which make it impossible to use the main stock market to raise equity for their businesses.

The GSE is targetting SMEs with a minimum stated capital of GH¢250,000 and that have been in operation for at least a year. It will also consider companies that have the potential to be profitable.

Ordinarily, a company should have been in operation for at least three years with a minimum stated capital of GH¢1million to qualify to list on the main exchange. And once listed, the entity is required to publish its financial statements quarterly.

For the new SME market, listed entities will be mandated to publish their statements half-yearly. Since the establishment of the GAX, six firms have expressed interest in listing on it.

The companies include Intravenous Infusions Limited, a manufacturer of intravenous pharmaceutical infusions; Juaben Oil Mills; Domod, an aluminium products maker; Processed Food and Spices; and Meridian Marshall.

The difficulty in getting SME companies that qualify to list on the GAX is deeply rooted in the issue of capital market or equity culture. In countries where this culture has developed over a long period of time, when entrepreneurs are looking for capital, the capital market becomes a good option.

However, in Ghana entrepreneurs have not developed that culture so they are not used to sharing and opening up their businesses -- especially with first-generation businesses.