The Lusaka Securities Exchange (LuSE) rang the bell on October 6 not because of a traditional listing but because of a long overdue solution to inclusivity in investing in the copper producer. Zambia’s leading Mobile Network Operator (MNO) MTN Zambia’s subsidiary Fintech announced the usage of its famous product MOMO (mobile money) in purchasing of equities on the local bourse. This is a landmark step for the LuSE proving that technology is vividly an enabler in many ways, the underestimated Cobb Douglass function factor of production for years.
Former Finance Minister Dr. Bwalya Ng’andu rings the bell at the Lusaka Securities Exchange Zaffico listing as IDC Group Chief Executive Officer Mateyo Kaluba and LuSE Chief Executive Officer Priscilla Sampa look on.
The last time the LuSE rang the bell was in 2020 (1Q20) when ZAFFICO made a listing after a successful Initial Purchase Offer (IPO) graced by former MinFin Head Dr. Bwalya Ng’andu as bourse Chief Executive Officer Priscilla Sampa joined in the celebration. Today, the “investo – finclusion” step to accord Zambian citizens buy stock on the stock exchange using the most popular digital channel dubbed MOMO simultaneously addresses the financial inclusion agenda because those in the remotest part of the nation but have access to mobile network can now be shareholders in Zambian entities.
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“MTN Mobile Money and the Lusaka Securities Exchange (LuSE) have announced a partnership that will see customers trade on the local stock exchange using MOMO!
My grandmother in Nyimba town, Eastern province can finally buy shares in some of Zambia’s leading organizations instantly on her mobile phone
I personally hope that this can demystify the theory that investing in stocks is a preserve for the elite. All Zambian’s deserve equal opportunity to financial freedom,”
Managing Director Fintech (MTN) Komba Malukutila
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Mobile money has seen exponential growth in usage especially in pandemic times where appetite for electronic money surged. However most schools of thought are of the view the central bank (Bank of Zambia) should accelerate its steps in emulating the LuSE’s initiative in allowing for purchase of government securities using digital channels such as MOMO as is done in jurisdictions such as East Africa, Kenya precisely through MPESA platforms. This will enable untapped retail pools of liquidity find a house in the financial system while achieving empowerment of citizens through simultaneously addressing financial inclusion using mobile network operations.
Zambia’s regulatory space especially that relating to the capital markets has seen an emergence of sand box innovative initiatives that have seen more fintechs propose transactability solutions.
OTHER INNOVATIONS THAT WOULD BE MORE EXCITING FOR INVESTORS
Capital markets are said to be the lowest hanging fruit in an economic turbulent environment as the globe champions a green agenda. MTN’s Fintech steps then provide unlimited possibilities around issuance of green bonds and retail subscription using MOMO. This would be a game changer as the capital markets aid attainment of sustainability aligned to the Sustainable Development Goals – SDGs. It is becoming evident that MNO’s will be strategic partners in the capital market boom in times when traditional credit lines are thinning out given frail sovereign posture.
The MTN license, was initially granted on the premise that the MNO would offer stake to the public at some point. To date, this has not actualized but the private placement agreement with NAPSA in December 2020 making MTN the largest MNO by asset size in Zambia coupled with the recent partnerships with the bourse, are positive signs towards an outright listing eventually.
The Kwacha Arbitrageur