The Zimbabwe Stock Exchange (ZSE) finally received regulatory approval from the Securities and Exchange Commission of Zimbabwe (SecZim) to operationalise its long-awaited SME-focused exchange under the brand name Zimbabwe Entrepreneurship Exchange (ZEEX).
While the announcement may appear procedural on the surface, it could represent one of the most significant developments in Zimbabwe’s capital markets in recent years.
The approval follows several years of efforts to attract new listings to the local currency-denominated bourse.
In April 2024, ZSE launched the inaugural Prospective Issuers Training Programme (PITP), a three-month initiative that ran through to June 2024. Ahead of the programme’s commencement, I was among a select group of investment professionals invited to the ZSE’s head office in Harare, where preliminary discussions were held to shape the framework and pathways for prospective listings.
A second PITP cohort followed between August and October 2025, demonstrating the exchange’s commitment to developing a pipeline of potential issuers before formally launching ZEEX.
The timing of ZEEX is particularly noteworthy.
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Between the conclusion of the first PITP programme and today, the ZSE has experienced one of the most difficult listing environments in its history. The only new listing recorded during this period was ZSE Holdings Limited (ZSEH.zw) on July 10, 2025. Even that transaction was not an Initial Public Offering (IPO). It was merely a listing by introduction in which both the ZSE and the Victoria Falls Stock Exchange (VFEX) became subsidiaries of ZSE Holdings.
At the same time, the market has witnessed a growing list of departures. Companies and securities such as BridgeFort Capital, Truworths, OMTT ETF, Khayah Cement, National Tyre Services (NTS) and Econet have either exited or migrated from the exchange.
First Mutual Properties is set to delist on July 1, while TSL is expected to delist on June 26, before listing on the VFEX on June 29. Meanwhile, the VFEX continues to attract fresh listings and growing investor interest.
Against this backdrop, ZEEX arrives at a delicate, but necessary moment.
Recognising the listing drought, the ZSE recently introduced Practice Note 18, a package of temporary concessions designed to lower listing barriers and stimulate capital formation.
Effective June 1, for a period of 36 months, the reforms include reducing the minimum market capitalisation threshold from US$10 million to US$1 million, lowering free-float requirements from 30% to 10%, waiving initial listing fees, removing mandatory external reviews of interim financial statements and permitting issuers to publish announcements digitally instead of relying on costly newspaper advertisements.
Viewed in isolation, these concessions may appear drastic. However, they are best understood in the context of the challenges facing the exchange. The ZSE cannot control currency policy, inflation expectations or broader macroeconomic stability. What it can control is its own rulebook. Practice Note 18 is therefore less a sign of desperation and more an attempt to make public markets accessible to a wider range of enterprises.
This is where ZEEX becomes important.
Zimbabwe’s economy is dominated by small and medium-sized enterprises, with more than 76% of economic activity estimated to reside within the informal sector. Yet most SMEs remain heavily dependent on expensive microfinance funding to finance growth. Access to long-term patient capital remains extremely limited.
Unlike developed markets where venture capital firms, angel investors and private equity funds actively finance emerging businesses, Zimbabwe’s entrepreneurial ecosystem lacks deep pools of risk capital.
ZEEX has the potential to address part of this problem.
The ZSE has already signed a Memorandum of Understanding with Invesci as a strategic institutional partner and has partnered with Red Sphere Microfinance to introduce a trade receivables discounting platform through ZEEX.
These developments suggest that ZEEX is being positioned as more than just a conventional stock market. Instead, it appears to be evolving into a broader capital-raising ecosystem for emerging businesses.
Whether SMEs embrace the platform remains the critical question.
Listing carries costs beyond compliance. Entrepreneurs must be willing to disclose information, submit to governance standards, engage investors and share ownership. For many privately owned businesses accustomed to operating informally, these requirements may initially appear burdensome. The benefits of listing must therefore become sufficiently visible and compelling.
My view is that ZEEX has a greater chance of success if it positions itself as a graduation platform rather than a destination.
The most successful companies on the ZEEX may eventually migrate to the ZSE main board or the VFEX as they mature. In this regard, ZEEX could become Zimbabwe’s equivalent of an incubator for future listed champions.
For investors, the opportunity is equally compelling, although accompanied by some risk. Risk-averse investors may find ZEEX unsuitable since smaller companies naturally have higher failure rates, weaker governance structures and lower liquidity.
However, public markets have always rewarded investors who can identify value before the crowd does.
Consider Padenga Holdings. A few years ago, many investors viewed the company primarily as a crocodile farming business. Through strategic restructuring and its expansion into gold mining, it has evolved into the largest company by market capitalisation on the VFEX. Investors who recognised that potential early created substantial wealth.
That is ultimately how capital markets function. The greatest returns are rarely generated from buying mature businesses at peak valuations. They often come from identifying emerging businesses before their growth story becomes obvious.
This does not mean investors should abandon caution. On the contrary, ZEEX participants will need to conduct rigorous due diligence and maintain realistic expectations regarding risk and liquidity. Warren Buffett’s observation that “risk comes from not knowing what you are doing” is particularly relevant in investing in the SME space.
For me, ZEEX represents one of the more exciting developments in Zimbabwe’s capital markets landscape. If properly structured, it could provide entrepreneurs with access to growth capital while creating a new avenue for investors seeking higher-growth opportunities beyond the increasingly mature counters on the VFEX and the shrinking universe of the ZSE.
The next generation of Zimbabwe’s corporate champions may not emerge from today's blue-chip stocks. They may very well emerge from ZEEX. The challenge now is execution. The opportunity is undeniable.
Whether the market embraces it will determine if ZEEX becomes a transformative platform for wealth creation or merely another chapter in Zimbabwe’s long history of ambitious capital market reforms.
Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.