FOR decades, Zimbabwe's small and medium enterprises (SMEs) have faced the same barrier when seeking finance: no collateral, no loan. But a new capital-raising platform is seeking to change that equation by shifting the focus from what entrepreneurs own to the strength of their ideas and growth potential.
Entrepreneurs without houses, vehicles or other assets to pledge as security have often found themselves locked out of formal financing, forcing many to rely on personal savings or expensive short-term borrowing to grow their businesses.
The development comes as more entrepreneurs turn to alternative forms of security to access loans, with registrations at the Collateral Registry more than doubling to 5 908 last year from 2 549 in 2024.
The Zimbabwe Entrepreneurship Exchange (ZEEX), launched by ZSE Holdings, provides a platform where businesses can connect directly with investors willing to fund promising ventures without relying solely on traditional collateral requirements.
In an interview, ZSE Holdings chief executive officer Justin Bgoni said collateral remained an option for businesses seeking cheaper funding, but it was no longer the only pathway to accessing capital.
“So, you have a choice. You can decide that you want to bring collateral or not bring collateral. If you bring collateral, it means that you can get cheaper funding. If you don’t have collateral, your funding may be a bit more expensive and a bit more patient. So, you choose,” he said.
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“There is always a choice in what you want to do. You don’t have to have collateral. No. If you look at people that raise money on the traditional stock market, they don't raise the money based on collateral. That's not what happens.”
No, indeed.
Unlike banks, stock exchanges do not provide loans against pledged assets. Instead, they connect businesses seeking capital with investors willing to finance companies they believe have strong growth prospects.
Investors assess factors such as the business model, market opportunity, management capability, financial performance and future earnings potential before deciding whether to invest.
Their return comes from sharing in the company's future success — either through an increase in the value of their investment or income generated by the business — rather than relying on the sale of collateral if the company runs into difficulties.
“You don’t come to the market and say, ‘I’m raising money because I want collateral.’ You come and you say, ‘I have a good idea. So, this is my idea. Do you want to share the journey with me or not?’ And the better your idea, the more interest you have out there,” Bgoni said.
“And if you have collateral, yes, it helps. But what's more important is how good your idea is. How good is your story?”
ZEEX allows entrepreneurs to present their businesses directly to investors seeking high-growth opportunities.
Investors can then decide whether they want to provide funding based on the company's potential, management and growth prospects.
Bgoni said the platform was designed to offer entrepreneurs access to funding that is more patient and potentially cheaper than conventional lending.
“What we have here is a platform where, if you have a good idea, there are people out there who are willing to listen to you, whom you can negotiate with, and they can give you funding that is more patient and relatively cheaper than what you are getting now. That's what ZEEX is for you,” Bgoni said.
“There are people out there who want to work with you on your journey. They want to be co-owners with you, and when that happens, you can grow faster, employ more people, and help the whole country grow faster."
Rather than offering a one-size-fits-all financing model, ZEEX allows entrepreneurs to choose funding options suited to their business needs.
Companies can raise equity by selling a stake in their business to investors, secure debt financing that is repaid over time without giving up ownership, or use invoice discounting to unlock cash tied up in unpaid invoices from large customers.
For entrepreneurs, this means financing can be matched to the specific needs of the business instead of relying solely on traditional bank loans.
Bgoni said the exchange was built around the idea that businesses should be able to access funding at different stages of their growth, with listing on the stock exchange becoming only one of several options.
“There are three levels that SMEs can get involved in this market. The first is what we call private markets. You can come and raise money without getting listed. So, you don’t have to come and get listed — you can come and raise money,” he said.
“Then the second one is if you're supplying to large companies and you want to discount your invoice. You've got an invoice, you’ve supplied to a large company, and you want to get money immediately — you can come onto the platform.
“Then the third one is what everyone knows. You come, you raise money, and you list. So, there are three ways that you can work on the platform. You don’t have to list if you don’t want to. You can just raise money.”
He said the platform is open to businesses of all sizes, including very small enterprises, provided they can convince investors that their idea has growth potential.
“It’s high-growth companies that we’re looking for, and they start small. We know that they start small,” Bgoni said.
He said the exchange’s role is not to decide which businesses deserve funding, but to provide entrepreneurs with a transparent platform where they can present their ideas and allow investors to make that decision.
“You don’t have to convince us as the exchange. You must convince people. There are people out there who will be willing to listen to you, who have money,” Bgoni said.
“You convince them, and I think most entrepreneurs — all they’re looking for in life — is a chance to show the good work that they’re doing. I think that’s the difference.”
Think of ZEEX as a business version of speed dating.
Instead of meeting one bank manager who decides whether to approve or reject a loan, an entrepreneur gets the opportunity to present their business to many potential investors.
Those investors then decide whether they want to partner with the business based on its potential, rather than simply the value of its collateral.
As Zimbabwe’s first dedicated capital-raising platform for entrepreneurs and SMEs, ZEEX aims to widen access to finance by changing the funding conversation from “What assets do you own?” to “How strong is your business idea? By doing so, it offers entrepreneurs a new route to capital while giving investors access to the country’s next generation of growth companies.