M-Pesa Transforms NSE Trading as Ziidi Trader Takes the Lead

The Nairobi Securities Exchange(NSE) has finally kicked off a new era . For the very first time , we have seen more than half of all share orders on a single day getting processed through M-Pesa - and that's a major game-changer in how Kenyans are choosing to invest.

According to Monday NSE data, 7,962 out of 14,300 orders were executed through Ziidi Trader the new stock trading platform that's now part of the M-Pesa app. That gave the platform a 55 percent share of the total transactions which is an impressive performance that highlights the growing role of mobile money in capital markets.

Trading Shares Directly from Your Mobile

Beforehand , investors had to go through a stockbroker to open a Central Depository System (CDS) account before they could even start trading shares, and M-Pesa's role was only to make payments. Ziidi Trader is changing all that.

Now, anyone with a mobile phone can buy and sell shares all from within the M-Pesa app - which is really quite straightforward. Gone are the days when they needed to have an individual CDS account - instead funds from lots of different investors get pooled into a single account that's managed by Kestrel Capital , the broker embedded in the platform.

The result, faster, simpler and more accessible trading

High Volume but Smaller Trade Values

Even though Ziidi Trader handled 55 percent of all orders, it still only accounted for two percent of the total value traded on that day. Analysts say this is because there's a Sh500,000 daily mobile money transaction cap which naturally limits the size of large trades.

Still , the numbers do show that there's a growing interest from retail investors - ordinary Kenyans who might have previously thought the stock market was too complicated or even downright intimidating.

More People Investing - That's the Idea

Safaricom and the NSE think that mobile-based trading will start to attract more individual investors, and with over 35 million M-Pesa users , it's a pretty big market out there. Plus, there are only about one million CDS accounts so the potential for growth is really huge.

Even in a pretty good two-year market rally, the number of investors only went up by a tiny 0.2 percent to 1.3 million. Data from the Capital Markets Authority (CMA) shows.

Ziidi Trader wants to change all that by bringing ordinary Kenyans - like small business owners & boda boda riders - into the capital markets.

Building on Previous Success

The launch is following on from the success of the Ziidi Money Market Fund, a partnership between Safaricom, Standard Investment Bank, and ALA Capital. Since it got approved in November, the fund has attracted 1.15 million customers, nearly half of all Kenya's unit trust investors.

Its a big opportunity for Safaricom too because the new trading platform creates an additional revenue stream within its financial services division as it continues to look at ways to expand beyond transferring money between people.

Is This a Turning Point for the NSE?

By making share trading as easy as sending money, M-Pesa could really help boost retail participation at the NSE. If more Kenyans start getting into mobile investing, the stock market might finally get the much larger and more diverse investor base it needs.

The early numbers are already starting to suggest that this digital shift is picking up pace.