Angolan Dream: companies can now stop suffering from bank financing

Similar to the American dream based on ideals of freedom and the ability of everyone to achieve success, "why not talk about the Angolan dream? Why not talk about the size and windows of existing and available opportunities for the realization of that desire?"

It is in this dimension of the need to materialize the aforementioned Angolan dream, which fundamentally urges the need for a close look at the national business fabric and the presentation of the following question: Does it still make sense for companies to cry for bank financing with a rapidly growing capital market?

According to the latest data from the Survey of Companies and Establishments (REMPE), presented by the National Institute of Statistics (INE), the country currently has around 83,722 which means that, given the size of the population, there is still a lot of potential in terms of setting up more companies in the country.

Without prejudice to the fact that there is still plenty of room for the emergence of more companies, the idea that it will not be the number of existing companies, but the robustness of the business fabric in the face of different economic cycles, is essential. Well, it is in this component that, in the face of the economic challenges that the country has been facing, the ecosystem of companies has worsened, facing great challenges in order to survive in the
Marketplace.

In the spectrum of numerous difficulties faced by companies, bank financing or credit stands out, motivated on the one hand fundamentally by the Bank's reserve resulting from the high level of defaults, that is, defaults that led to special attention being paid to the topic of toxic assets. On the other hand, the economic challenges that resulted in successive fiscal deficits and consequently the increase in the issuance of public debt instruments with attractive rates and a zero risk associated with the Issuer.

Thus confirming the negative correlation between the fiscal deficit and financing the economy. That is, the greater the fiscal deficit and the respective issuance of public debt instruments, the less credit granted to companies.

It is in this dimension that, despite the ongoing programs of the Executive and the regulatory initiatives of the National Bank of Angola in terms of creating impact measures to increasingly stimulate the financing of the economy through credit to companies, it continues to be verified that the challenges remain the same, which could lead to the reflection that eventually the "new normal" represents the rule and not the exception in terms of the process of financing companies via the banking sector, that is: Is it not normal for banks to be inhibited in terms of financing companies?

Ora, sem prejuízo do aumento do crédito a economia crescer 71% em 2022 evidentemente acima dos 65% verificados em 2021, representando cerca de é 6%, segundo os dados que constam do estudo periódico Banca em 

Analysis, released by Deloite, confirms that the “new normal of difficulties in financing companies” remains the same, fundamentally marked by a rather bureaucratic component in terms of access to the
financing via the banking sector and high interest rates.

In this way, since difficulties have already been duly identified in terms of access to finance via the banking sector, there is an urgent need for companies to reinvent themselves and carry out a reflection in order to validate whether it makes sense to continue to have the financial sector as their exclusive solution for financing their activities. Bank officer.

Evidently, given the tripartite supervision model of the Angolan financial system, with the capital market being the most recent, the dimensions of some existing opportunities in that market have not yet been properly identified by companies. In this context, there is a need for them to “stop suffering in search of bank financing”, when, in addition, they can obtain financing through the existing markets on the Angolan Debt and Values Exchange (BODIVA).

In this context, every financing process via BODIVA markets in accordance with market regulations leads us to the following assumptions: (i) How to obtain financing via BODIVA markets? (ii). What are the requirements? (iii). What is the cost structure?

Certainly in the context of presenting financing via BODIVA markets, the issues listed above are among the main concerns of companies. In this way, companies can obtain financing on the BODIVA markets through the issue of bonds or through the issue of shares. In the process of issuing bonds, the company will issue securities representing debt while in the process of issuing shares, the company will issue securities representing its share capital.

In terms of requirements, companies can obtain financing from BODIVA according to the intended market segment and its structure, as identified below:

Another element that certainly ends up being part of the concerns of companies regarding financing via BODIVA Markets, is related to the cost structure that, in a simplified way, we list below, with companies naturally having to consult the price list and the tax framework. in order to visualize some exemptions and respective benefits to the financing process, via BODIVA markets.

In this context, this reflection leads us to the idea that given the current situation in terms of bank financing, companies that are attentive to the development of the capital market and decide to enter will certainly be able to obtain the best results in the future and become more competitive since, when financed via the Stock Exchange, they will be able to guarantee:

• Obtaining large-scale financing, which can help promote the company's growth;
• Reduction of the IAC rate from 10% to 5% on the distribution of dividends during the first 5 years after admission to trading and exemption from stamp duty on secondary market trading.
• Exemption from IAC in the distribution of profits/dividends by an entity whose capital is traded on a regulated market and in which the shareholder holds a stake of not less than 25% for a period exceeding one year.
• Increase the company's corporate reputation and consequently the status, visibility and credibility in the market.

In view of the above, in the new era of the Angolan financial system, it is not permissible to narrate financing difficulties having the banking sector as an exclusive reason, given that the challenge for all stakeholders involves the continuous preparation and safeguarding of best practices and the identification of channels alternatives to the traditional and it is in this challenge that the need to “Think Market!” is urgent.