Steward Bank says it has partnered with mobile and Online trading platform C-Trade to enhance retail investor participation in local capital markets.
Retail investor participation in local capital markets is estimated at a rather low 1 percent.
Steward Bank head of digital payments and financial services Tapera Mushoriwa, said local financial institutions can play a greater role in driving capital markets participation among the broader public.
“Banks have traditionally played an intermediator role. But as banks, we need to replace that balance sheet management approach and we start looking at technology. Banks have a huge role to play in terms of upgrading their technology.
“One way is creating a layer above our legacy systems, which allows for interaction with various capital market players and this can be, for example, through open APIs and that will allow immediate connection with retail customers. The other side is the banks themselves facilitating financial inclusion element with the individuals,” said Mushoriwa.
“We have partnered with C-Trade and created within our mobile application a tool where our retail customers can actually buy micro-shares, even for as little as a dollar. You already have got players such as Untu Capital, which have started tailoring bonds that people can buy for as little as $50 and once you start making that affordable for the retail player that broadens the scope of capital markets.”
Capital markets investments typically cover a wide range of products.
But locally, the capital markets are not that well developed and is dominated by shares although one can invest in Collective Investment Schemes /Unit Trusts and other privately sold funds.
The Securities and Exchange Commission of Zimbabwe (SECZ) is focused on developing local markets so that a wide range of investment products such as real estate investment trusts (REITS) and derivatives.
In a related vein, SECZ in partnership with Escrow Systems launched C-Trade in July last year.
The mobile trading platform has seen a steady growth in users, with accounts increasing to around 17 000 during its maiden trading year, and trades on the platform have reached a monthly average of 300 000.
Meanwhile, Escrow CEO Collen Tapfumaneyi, said the firm had implemented a number of strategic adjustments to enhance the C-Trade platform, including the introduction of Investment Clubs, aimed at crowd-sourcing investments among participants to realise higher capital to buy quality shares on the Zimbabwe Stock Exchange (ZSE) and the second tier bourse, Financial Securities Exchange (FINSEC).
The Investment Clubs allow participants to buy shares in bulk. This is achieved through depositing contributed funds into one account or the C-Trade platform and using the same account to buy shares through the use of an administrator.
Allotment of funds to club members is done according to what they have contributed through the use of basic ratios or percentage calculations.