NYANGA, Zimbabwe — Charles Mushanawani, 46, a goat breeder in a small rural community of Burma Valley east Zimbabwe, never dreamed of being a stock market investor on the Zimbabwe Stock Exchange.

“I always thought these things are so complicated and reserved for the rich, learned people out there in the big cities,” he told Zenger News.

“But now I can virtually trace real-time share price movements on the Zimbabwe Stock Exchange portal via my mobile phone while going about my goat rearing business in the village.”

But until three years ago, all this was a pipe dream to Mushanawani and many other Zimbabweans excluded from the country’s financial system—until a local financial solutions firm changed the situation.

In 2018,  Escrow Group Zimbabwe launched the C-TRADE mobile application, Africa’s first online and mobile platform for real-time access to capital markets, marking a major turn on the country’s financial services landscape.

Three years on, nearly half of total trades on the country’s flagship bourse, the Zimbabwe Stock Exchange, are conducted via the platform, the company told Zenger News.

The secret behind this exponential growth in usage is its ability to give millions of Zimbabweans with mobile phones access to the stock market in a country where mobile phone penetration reached 94 percent in 2020, according to the country’s Postal and Telecommunications Regulatory Authority.

Financial inclusion efforts in Zimbabwe’s financial sector bear fruit as ordinary folk can now trade company stocks and transact using a mobile phone. (Kudzanai Abel Gerede)

More importantly, this innovation has the potential to drive financial inclusion for millions who remain excluded from the formal banking system and capital markets.

The Reserve Bank of Zimbabwe Financial Inclusion paper traced the five-year journey between 2016 and 2020. The level of financial exclusion in capital markets in Zimbabwe stood at 99 percent of the population in 2014 but has since improved due to digital infrastructure developments.

Mushanawani says he is gradually learning stock market trends and other investing tips on the ZSE-Direct, another online platform for trading that also offers tutorials in investing.

“A huge part of my learning has been through interactions with fellow stock traders in various Whatsapp groups and online literature around the topic,” Mushanawani, who is planning on investing all his agriculture profits in the stock market, told Zenger News.

To start trading, one needs to download the C-TRADE application then proceed with the registration process, which involves selecting a stockbroker. Everything is sorted out for one to start buying and selling shares.

Since he started trading a year ago, Mushanawani says his stocks have risen by over 200 percent.

“I bought my first 1,000 shares on Zimbabwe Stock Exchange with proceeds from five goat sales. The investment has more than trebled, and I’m looking forward to my first dividend cheque.”

The Zimbabwe Stock Exchange has been lucrative for local investors lately. The bourse was Africa’s best performing exchange in 2020, with the Zimbabwe Stock Exchange All Share Index up 1,045.8 percent for investors in Zimbabwean dollars (ZWL$) and up 135 percent in US dollars, according to the research firm African Markets.

But without the digital developments in Zimbabwe’s financial services sector, these rewards could not have been possible for ordinary folk like Mushanawani, excluded for the better part of his life.

Through the country’s robust digital infrastructure, stock traders can even make payments via instant mobile money platforms such as Ecocash without necessarily having to do a bank transfer.

“C-Trade has leveled the playing field between institutional and retail investors by reducing disparities between large and small investors’ ability to access information and the capital market, hence helping the capital market to play its role of lubricating the economy effectively,” Eliah Sarayi, head of sales and marketing for the Escrow Group, the providers of C-TRADE, told Zenger News.

“From 2018, when C-TRADE was launched, over 20,000 retail investors have created trading accounts. Of the total number of registrants, 72 percent are first-time investors.”

Another retail investor, whose interest in stock markets ignited in 2018 when C-Trade came on board, Alfonce Maketo, said the coming of C-TRADE made life easier for first-time investors due to the scrapping of paperwork with stockbrokers.

“Now, I can do it in my home and over the phone without having to engage a stockbroker, who happens to have a myriad of requirements for you to invest through them,” he told Zenger News.

“This made investing in the stock market appear elitist.”

Maketo, who resides in the small town of Norton, west of Zimbabwe’s capital city Harare, has built a strong portfolio of all sorts of companies on the bourse.

“My portfolio has 18 counters(companies): 5 Top Ten counters (the biggest companies by value), 5 mid-cap (medium companies by value), and 8 small caps (the smallest companies by market value)—the so-called penny stocks. And yes, dividends have been coming through lately from companies like Econet, InnscorDeltaOK ZimbabweMeikles now, SimbisaMash Holdings, all have paid dividends.”

The Zimbabwe Stock Exchange has been lucrative for local investors lately. (Sigmund/Unsplash)

Even the Zimbabwe Stock Exchange has now developed an online and mobile platform that enables users to view their Central Supplier Database holdings and buy and sell securities listed on the stock exchange remotely.

More young Zimbabweans, particularly the unemployed, are taking an interest in the stock market, with many of them frequenting internet cafés to keep updated with market prices on the stock exchange portal. For a minimum of ZWL$500 ($5), one can start trading on the Zimbabwe Stock Exchange.

This success story is part of the fruits of Zimbabwe’s Financial Inclusion Strategy (2016-2020) that identified the high levels of financial exclusion and curved a path to ensure a large segment of the population accesses financial products.

In March 2021, the World Bank Digital Economy for Zimbabwe Country Diagnostic report noted that digital infrastructure is one of Zimbabwe’s relative strengths.

The report also noted the country’s well-developed digital payment system, where 96 percent of all the country’s formal sector transactions are conducted through digital means, and only four percent are cash-based. The government uses digital money almost exclusively.

However, the report also points out the huge gaps in internet connectivity in rural areas on top of the high cost of data and electronic payments.

“To truly reap the digital dividends, the new digital economy in Zimbabwe needs to be inclusive to ensure that anyone — regardless of age, gender, income, or geographic location — has the ability to access digital tools and services,” says the World Bank report.

As a result, users of the C-Trade app sometimes experience technical glitches that slow down information loading on the Zimbabwe Stock Exchange switchboard.

“The occasional slow uploading of data from the Zimbabwe Stock Exchange mainboard onto the C-TRADE platform sometimes affects trading,” Chiketo told Zenger News.

“We need the information in real-time. Whatever is on the Zimbabwe Stock Exchange main board should tally with what is on the C-Trade platform. At least a minute time lag is okay.”

(Edited by Kipchumba Some and Amrita Das)

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