The Nairobi Securities Exchange (NSE) is preparing to allow investors to buy and sell shares directly via M-Pesa, integrating Kenya’s dominant mobile money rail into equity trading infrastructure, according to Business Daily Africa.
At a surface level, this is a convenience play. However, it signals a shift in how retail capital accesses public markets in frontier economies.
“This initiative is the heartbeat of our strategy to grow active retail investors to nine million by 2029,” said Frank Mwiti, chief executive of the NSE, framing the move as a deliberate push to reposition the exchange from an institution serving a narrow investor class to one embedded in everyday financial life.
What is changing
Under the planned model, investors will be able to fund brokerage accounts and execute equity transactions using M-Pesa, operated by Safaricom.
This collapses several long-standing friction points in Kenya’s capital markets value chain:
For instance, funding relied on bank accounts despite mobile money’s dominance in the country. Settlement times also include T+2/T+3 cycles. In addition, there’s usually manual reconciliation between payments, brokers and custody systems.
Instead, mobile wallets will become the primary on-ramp to listed equities, much as they already are for government securities and savings products such as M-Akiba, where mobile channels have historically driven retail uptake.
Safaricom chief executive Peter Ndegwa positioned the move as part of a broader evolution of M-Pesa itself. “We are moving M-Pesa from a tool that helps people spend and send money into a platform that helps them grow it,” he said, as the company presumably shifts from payment to wealth infrastructure.
Why this matters beyond convenience
Retail participation has been structurally weak
Despite Kenya’s relatively sophisticated market infrastructure, direct retail participation on the NSE remains shallow. Even foreign investor participation has weakened.
The market has roughly 1.5–1.6 million registered CDS accounts, according to exchange and depository disclosures. However, industry and regulatory commentary suggest only a small single-digit percentage of these accounts trade actively in a given year, indicating widespread dormancy.
By contrast, Safaricom reports more than 35 million active M-Pesa users, highlighting a structural mismatch between where household liquidity sits and where equity market access begins.
The NSE is effectively meeting investors where liquidity already resides, rather than forcing migration into bank-led channels that many younger and lower-income Kenyans use only intermittently.
Payment rails are becoming a capital market infrastructure
This move blurs the historical boundary between payment systems and securities infrastructure.
In global markets, Brazil’s PIX has transformed instant payments but remains largely peripheral to equity trading. India’s UPI feeds retail investment into mutual funds and simplified equity platforms, contributing to a surge in first-time investors. In the US, brokerage-linked instant funding rides on Fedwire and ACH upgrades, shortening funding and settlement cycles.
Kenya is leapfrogging by allowing a telco-led payment rail to sit directly upstream of stock trading, a configuration that remains rare even in developed markets.
The mechanics: from board lots to single shares
The strategic shift is reinforced by structural reforms implemented in late 2025, which re-engineered how retail investors interact with the market:
| Feature | Old system (pre-2025) | New “Ziidi” model (2026) |
| Minimum trade | 100 shares (board lot) | 1 share (single-unit rule) |
| Onboarding | Physical forms / broker visit | Instant digital KYC via M-Pesa |
| Settlement | T+3 | Same-day / near-instant |
| Account structure | Individual CDS account | Omnibus digital wallet |
Together, these changes lower ticket sizes, compress settlement risk, and remove physical onboarding barriers, aligning equity trading with the behavioural norms of mobile-first users.
Settlement, risk, and regulatory implications
For regulators and market operators, the model raises second-order questions:
How tightly will M-Pesa transactions be synchronised with clearing and custody systems? How much consumer protection will first-time retail investors get through a consumer payments interface? How much will mobile money uptime affect market activity in the long run?
Traditional stockbrokers have raised concerns that direct market access could encourage uninformed risk-taking without advisory buffers. The NSE, however, has argued that brokers remain central to liquidity provision and regulatory oversight, even if the user interface becomes digital-first.
The tension mirrors the early resistance banks showed to M-Pesa itself in the late 2000s — a reminder that distribution shifts often precede institutional realignment.
Market signals: Safaricom’s “fintech premium”
Since the Ziidi ecosystem entered pilot phases late last year, and as direct-access plans have crystallised, Safaricom’s share price has begun to reflect a modest “fintech premium”.
This year to date, Safaricom shares have grown by 65.4%. Investors appear to be increasingly valuing the company not just as a telco, with the stock recently testing the KES 30.00 psychological level. So far, it has gone as high as KES 31.9 in the past one year.
What this means for Africa’s capital markets
Kenya’s experiment offers a potential template for other mobile-money-dominant markets like Ghana, where mobile money penetration far exceeds brokerage reach. Also, Tanzania and Uganda, which share similar telco-led financial ecosystems but shallow equity participation.
If successful, the model reframes capital market deepening not as a broker-led or bank-led challenge, but as a payments-led distribution problem, aligning exchanges with the rails that already intermediate everyday financial life.
For investors, regulators, and exchange operators across the continent, the NSE–M-Pesa integration is a live test case in whether payment rails can broaden equity participation at scale without compromising market integrity.
