Transformation of Kenyan Capital Markets - Collaboration with Nairobi Securities Exchange PLC

Updated: Jul 21, 2021

Nairobi Securities Exchange is among the top 5 exchanges in Africa and has a very long and illustrious history. Today NSE is a fully demutualized and self-listed enterprise. It has leveraged technology to take financial products to a large section of the Kenyan population. The products that trade on NSE are equities (regular and alternative boards), government securities, corporate bonds, ETFs and derivatives (index and single stock futures).


The Business Problem

Just after the global financial crisis, in 2009, 3 brokers collapsed along with several millions dollars of investor wealth. The reasons for the collapse was lax systems and processes. The management did not have visibility of the operations and revenue leakage went unnoticed. This situation created a crisis of confidence in the capital markets. The stock exchange along with the regulator and association of stock brokers decided to implement a technology platform that enforced minimum standards on all brokers.


Chella Software’s role and contribution

Chella Software was selected as the partner by NSE to setup a Common IT Infrastructure for the entire Kenyan capital market. Over the past decade we have enabled Kenyan brokers to grow their business many fold and at the same time manage their risks so there is no loss of control or revenue leakage.


The implementation in numbers

  • Total number of brokers using the platform 18

  • 9 brokers access the system on a centrally hosted data center, designed and implemented by Chella Software

  • About 95% of all transactions in Kenya flow through Chella Software’s system.

  • Total number of users using the system – over 1500 users across the broking firms

  • Total number of client depository accounts managed through the system – 2 million

  • Number of investors accessing the system through internet and mobile – 10,000 + active investors

Benefits to the market and Kenya in numbers

  • Zero broker default after the implementation of the system

  • 99.99% of uptime on the centrally hosted environment. Has been running flawlessly for 7 years now

  • Internet and mobile users have increased from 0 to 15000+ across the country.

  • Application technology cost as a % of revenue has decreased from around 7% to less than 5%.

  • Brokers have had zero increase of their technology maintenance cost in 7 years in spite of inflation.

  • New products launched with incremental investment in IT

- Online trading

- Mobile trading

- Mobile wallet based payin and payout

- ETFs

- REITs

- Margin trading

- Over the counter trading

- Derivatives

- Open APIs for third party systems to integrate

- ChatBOT based trading

- Day trading (close to launch)