How Mobile Phones are Boosting Retail Investor Participation in the Tanzania Stock Exchange

Tanzania is experiencing a digital transformation, with a growing number of people gaining access to communication and internet services. This shift is having a profound effect on the country's society, culture and economy by enhancing access to essential services and boosting productivity and efficiency across several sectors, including capital markets.  

Mobile technology is at the heart of Tanzania’s digital transformation. According to the Tanzania Communications Regulatory Authority’s quarterly report (end of June 2024) there were 75.60 million active cellular mobile connections in Tanzania. To put this in context, according to latest census figures, Tanzania’s population is estimated at 61.7 million. 

In 2020, the Dar es Salaam Stock Exchange (DSE) launched a digital-trading platform to enhance market liquidity and expand investor participation. One of its objectives was to create an affordable and convenient way for mobile phone users to take part in Initial Public Offerings and secondary market trading. It also aimed to eliminate the need for investors to visit stockbrokers' offices, which were primarily located in Dar es Salaam. 

An integration with the National Identification Authority facilitates Know Your Customer processes prior to onboarding new investors. This is the key requirement; all exchange’s digital subscribers must link their mobile phone number with the National Identification System for verification of Tanzanian residents. 

The initiative aimed to integrate the digital platform with banks and Mobile Network Operators (MNOs) for widespread adoption. Strategic partnerships with banks and MNOs play a key role in driving the platform's visibility. 

DSE has positioned its digital platform as an essential service that complements the exchange's existing digital financial services. 

With a significant proportion of the population actively engaged in digital-financial services, the Exchange’s digital platform is poised to transform the trading landscape; making it more accessible and inclusive. Currently, only those who are residents of Tanzania can invest through the platform. However, DSE is planning to enhance the platform to allow Tanzanians in the diaspora to access it as well.  

Like other mobile solutions such as mobile-money payments, short-term loans and insurance, the proposed digital trading of securities is expected to positively impact Tanzania’s society and economy. For the DSE, this solution aims to tackle the low awareness of available investment opportunities within stock-exchange operations.