Source:HKTDC Research

While previous Fintech waves witnessed in countries like America and China were built on the development of cutting-edge technology (think Silicone Valley), Africa’s new online trading revolution is bolstered by the humble smartphone.

Mobile phones have now become ubiquitous in Africa. This sparked a wave of economic growth, with the IMF estimating that four of the five countries with the greatest GDP growth rates in the world have benefited from this wave.

African countries that were left out of the first wave of Fintech innovation from the United States and China have already begun to fly right into the hyper-efficient mobile infrastructure.

Kenya's ICT sector is quickly attracting international investors to its economic potential. Armed with a dynamic and tech-savvy young population, online trading and other disruptive Fintech start-ups have made Kenya a leader in the region.

Welcome To Silicone Savannah

The Kenyan IT scene is known as the "Silicon Savannah," and it is home to some of the continent's most cutting-edge firms. Interestingly, the lack of institutional infrastructure in Africa has fueled a technology revolution on the continent.

Kenya is currently known as a totally connected environment thanks to its underwater fiber optic cable, which provides some of the fastest mobile internet speeds in the world.

Entrepreneurs, investors, and technologists alike are already taking advantage of its $1 billion tech ecosystem, which includes established companies like Facebook, Microsoft, IBM, and Intel.

An Environment That Fosters Online Trading

Retail Forex and CFD trading is booming in Africa, and many prominent worldwide CFD brokers have applied for or acquired full regulation with FSCA, CMA in South Africa, and Kenya, respectively, in 2020. This is great news for African traders.

With a regulated forex market, Kenya ranks as Africa's third-largest retail forex trading market. An estimated 80% increase in retail trading in Kenya's online FX trading business has already been achieved.

Younger demographics, lower internet costs, and more mobile penetration are among the key factors cited as contributing to the surge.

According to a regulatory framework for Online Forex Trading, Kenya became the second African country to do so in 2017. On the 27th of August, 2017, the Kenyan regulatory authority CMA put in place a regulatory framework.

Regulated Brokers can now freely market and offer their online trading services in Kenya, and ordinary traders can now trade currencies in a regulated atmosphere.

Many people were forced to work from home in 2020 due to the pandemic, while others were left without a job. Millennials in particular were looking for ways to augment or sustain their income, and so began the new wave of online trading.

As such, Kenyans have largely followed the growing online trend towards online trading, spurred by the same effects of lockdown, but nurtured by a young population that is keen to carve new income avenues using the improved technology now at their disposal.

Investors in Kenya are now able to trade online using their smartphones and other devices due to better telecommunications infrastructure.

The forex market has seen an increase in the number of new traders due to factors such as lower initial capital requirements, higher leverage, and marketing by CFD brokers, which has resulted in a thriving online trading hub for Kenyans from all walks of life.