Mobile Finance

Kenyan operators can now facilitate access to investment opportunities

Kenyan operators can now facilitate access to investment opportunities

Kenya’s Capital Markets Authority (CMA) says it has officially licensed operators Safaricom and Airtel Money Kenya to operate as what are called intermediary service platform providers (ISPPs).

This regulatory approval, announced last week, will allow millions of mobile users to access regulated capital markets directly from their phones in what is described as a strategic shift in how Kenyans interact with the Nairobi Securities Exchange. 

As ISPPs, these two companies will facilitate the marketing and distribution of approved so-called collective investment schemes such as money market funds and equities, bridging the gap between fund managers and retail investors. Indeed, Safaricom and Airtel Money can now facilitate access to investment opportunities – such as securities and other capital markets instruments – directly via their mobile ecosystems.

Safaricom is expected to fully integrate trading features within the M-Pesa mobile money app. Users will be able to open accounts and execute trades in under two minutes with as little as KES100 (about US$0.77). Airtel Money is also expected to leverage its growing subscriber base to offer similar investment products.

CMA CEO Wyckliffe Shamiah, quoted by IT Web Africa, describes the approvals as a key step towards aligning capital markets with the national goal of increasing the savings-to-GDP ratio.

"These licenses are key to offering Kenyans a broader range of investment opportunities," he explains. "By meeting investors where their money already resides, in their mobile wallets, we can tap into a vast pool of household liquidity that was previously disconnected from the capital markets."

The CMA believes this initiative can “enhance competition, expand investor choice, and strengthen digital access to regulated capital markets products".

Both Safaricom and Airtel have built digital ecosystems that go well beyond money transfer to include insurance, lending, savings and merchant services.



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