Average Share Purchase on M-Pesa Ziidi Trader Hits Sh4,818 Amid Growing Retail Interest

Individual investors using the M-Pesa-backed Ziidi Trader platform are now spending an average of Sh4,818 to buy shares on the Nairobi Securities Exchange (NSE), nearly doubling from Sh2,872 at the platform's March launch.

The mobile-based service, a collaboration between Safaricom, NSE, and Kestrel Capital, enables seamless share and corporate bond trading directly via users' phones without the need for traditional brokers or new accounts. It leverages existing M-Pesa credentials and PIN authentication, simplifying market access.

Retail Trading Trends and Challenges

• Nearly one million investors have signed up since launch, yet active traders remain below 150,000.
• Investors have placed 566,000 buy orders compared to 265,000 sales, indicating a buy-and-hold approach that supports long-term capital formation.
• Despite accounting for 54% of NSE share orders, the platform's trade value represents only about 2% of total turnover.
• Lower active participation is attributed to gaps in investor education rather than access, with many unsure which stocks to purchase.

Efforts to Boost Participation

Industry experts advocate for broad-based instruments like exchange-traded funds (ETFs) to simplify investment decisions for retail investors. Currently, NSE lists two ETFs—Absa New Gold and Satrix World Feeder—with the Wall Street Africa Banking Index ETF expected later this year.

Eric Ruenji, Chairman of Theo Capital Holdings, emphasized the need to guide new investors on what to buy rather than just providing access, saying, "People want to invest but don’t know what to invest in. It’s no longer about having market access."

Impact and Future Outlook

The Ziidi Trader platform played a significant role in the Kenya Pipeline Company IPO, where 73,000 individuals participated and 36,000 used the app to place orders.

Safaricom highlights the platform as a milestone in financial inclusion, aiming to expand retail investor numbers to nine million by 2029. Shares bought via Ziidi are held in an omnibus account managed by Kestrel Capital, ensuring efficient trade execution on behalf of users.