Lusaka Stock Exchange highlights financing models to drive business growth

The Lusaka Securities Exchange (LuSE) has outlined a range of financing models and investment opportunities available on the capital markets to support companies seeking to expand their businesses.

LuSE Central Shares Depository Manager, Peter Mwepu, unpacked both equity and debt financing models during his presentation on capitalisation strategies, investment opportunities, and share value creation at the ongoing 2025 Annual Insurance Conference in Livingstone.

On equity financing, Mwepu said key advantages included the absence of debt obligations and increased investor participation through Annual General Meetings.

However, he cautioned that risks such as ownership dilution and dividend expectations remain significant considerations.

“Currently, according to our rules, at least 25 percent of shares must be offloaded on the market for a company to list on the LuSE. This carries risks of dilution or even potential takeovers, which discourages some firms from adopting this model,” he said.

Turning to debt financing, Mwepu described it as a “promissory note,” explaining that while it prevents ownership dilution, it exposes companies to the risk of insolvency if they fail to service debt obligations.

“Investors want their money back whether you have made a profit or not. They are at liberty to take you to court to recover their funds,” he warned.

Mwepu also highlighted green bonds as an emerging investment vehicle, particularly attractive for businesses implementing environmentally sustainable projects.

He stressed that companies must align their capitalisation strategies with long-term business objectives in order to maximise investment opportunities and foster sustainable growth.

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