Best Forex Brokers in Kenya
Kenya is the third-largest economy in sub-Saharan Africa, behind Nigeria and South Africa, and one of the most-productive economies across Africa. Kenya is considered a frontier market and has recorded continuous growth since 2005. The local currency is the Kenyan Shilling, and Kenya is the East African business, finance, and technology hub, with telecommunication and tourism also expanding. Online Forex trading in Kenya remains regulated by the Capital Markets Authority (CMA). International brokers do not require a CMA license, unless they are headquartered in Kenya, to accept Kenyan Forex traders.
The young and tech-savvy population is eager to drive its economy forward, many international companies locate regional headquarters to Kenya, and Forex trading in Kenya is swiftly increasing in popularity, amid low capital requirements. The payment processor M-Pesa, launched in 2007 by UK-based Vodafone and Kenyan Safaricom, is a mobile phone-based money transfer, payments, and micro-financing service, targeting the unbanked, further enables access to the financial system. It became the most successful mobile-phone-based financial service in the developing world by 2010.
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Understanding the Forex Market in Kenya
Forex trading is growing in popularity across Kenya, especially trading on mobile phones. The trend accelerated since the successful launch of M-Pesa, which connected millions of unbanked in Kenya to the formal financial system. There are not many licensed Forex brokers in Kenya, with EGM Securities, the first non-dealing online Forex broker operating out of Nairobi, and SCFM Limited, the second one. While financial pyramid schemes and other scams exist, as with most frontier markets, the Central Bank of Kenya, and the Capital Markets Authority (CMA) are equipped to ensure a trustworthy environment. It positions Kenya as an excellent growth market.
Is Forex Legal in Kenya?
Yes, Forex is legal in Kenya. There are no restrictions on Kenyan traders to open accounts with international brokers, which do not require a CMA license to operate in the country.
Forex Trading Regulations in Kenya
The Forex market in Kenya is primarily regulated by the Capital Markets Authority (CMA), while the Central Bank of Kenya may introduce regulation for the CMA to enforce. The CMA drafted new rules to tighten regulation, including requiring all international brokers to apply for a license, confirm minimum capital requirements, and file quarterly and annual reports with the regulator. It is a further sign of the growth of Forex trading across Kenya.
The CMA (Capital Market Authority)
The CMA has regulated Forex brokers in Kenya since 1989. It grants three licenses, Dealing Foreign Exchange Broker, Non-Dealing Foreign Exchange Broker, and Money Manager. In 2019, the CMA received the Most Innovative Capital Markets Regulator in Africa award. To date, only two Kenyan brokers hold a CMA license.
How to Verify Your Broker is Regulated?
Traders can check the broker's Company Registered Number against the CMA database to confirm of a CMA license was granted.
How to choose a Forex broker as a Kenyan trader
You need to determine what type of Forex trader you are or want to be, and then find the broker offering the right services to you. New retail traders should seek the best educational courses, low-frequency traders commission-free accounts, and high-frequency traders require tight spreads. There are initiatives focused on Forex exchange Kenya to meet the expanding interest in Kenya. Brokers with M-Pesa accounts are preferable, but Skrill and WebMoney are alternative options that connect with M-Pesa. An upgraded MT4 trading platform, superior proprietary alternative, and mobile-focused app are beneficial.Back to top ⬆
Trading Fees & Commissions
A broker’s cost structure will have a significant impact on your profitability and requires careful consideration.
- Spreads are the difference between the bid and ask prices. They are the most basic cost in Forex trading. Commission-free spreads can be as low as 0.4 pips, while commission-based commence from 0.0 pips. Anything above 1.0 pips, on liquid currency pairs, represents an excessive mark-up.
- Swaps are costs related to leveraged overnight positions, and transparent brokers list their swap rates on their website and the order ticket. MT4/MT5 traders can obtain them directly from the trading platform. They differ across assets and can change frequently.
- Commissions apply to Forex accounts with access to raw spreads, charged per lot, and to equity traders in the percentage of the order value.
- Other fees can consist of deposit/withdrawal fees, currency conversion costs, and inactivity charges.
The MT4 trading platform, once upgraded with add-ons, remains the best trading platform for most traders. It fully supports automated trading and has over 20,000 upgrades to improve the trading environment. Some brokers offer excellent proprietary alternatives, while online Forex trading in Kenya is also heavily conducted on mobile phones, for which traders should consider customized mobile apps.
Trading from the right account type is essential and will have a significant impact on your trading results.
- The Micro Account is best suited for deposits below $500, where 1.0 lot equals 1,000 currency units. It is excellent to learn trading and test strategies in a live account.
- The Mini Account is ideal for portfolios below $10,000, and 1.0 lot is equal to 10,000 currency units. Most retail traders should manage portfolios from this account.
- The Standard Account is for professional traders and retail traders with deposits above $10,000, with 1.0 lots totaling 100,000 currency units. It usually offers the best trading conditions, a fact to consider.
- The Islamic account does not charge swap rates but can demand higher minimum deposits and wider spreads to cover the shortfall. Make sure to read the terms and conditions.
Forex Brokers Accepting M-Pesa
Pesa launched in Kenya in 2007 and has over 20 million users in Kenya. It allows swift transactions from mobile devices, access to the financial system from the unbanked, and ensures vast availability of the Forex market with easy access. While the availability of M-Pesa is not widespread with many international Forex brokers, a growing number offer it. Skrill and WebMoney allow money transfers to M-Pesa in Kenya, offering an alternative to consider. The best Forex brokers in Kenya will ensure that M-Pesa is available, as it represents the most convenient option for Kenyans.
Most Forex brokers explain all products and services on their website, while an FAQ section attempts to answer the most common questions. For other matters, live customer support resolves issues. Most support is in English, but many brokers deploy multi-lingual staff, per their client-base. Most traders will never require additional assistance at well-managed brokers but having swift access to customer service is essential.
We reviewed over 100 brokers based on eleven criteria for more than 200,000 words of dedicated research compiled over 1,000 hours to find the best Forex brokers in Kenya.
FAQsIs Forex trading illegal in Kenya?
No, Forex trading is completely legal in Kenya. There have not been any newsworthy reports of brokers operating illegally in Kenya or of non-Kenyan brokers scamming Kenyan traders.How to start Forex trading in Kenya?
You can start trading Forex in Kenya by finding the broker that suits your trading needs, opening an account, and making a deposit. You should also make sure to educate yourself before managing a live trading account.How to trade Forex in Kenya?
Review our listing here of the top offshore international Forex brokers for residents of Kenya and decide which broker best suits your needs. Open a demo account and check them out and teach yourself to trade profitably, then switch to a live account once you are consistently profitable.How much do I need to start Forex trading in Kenya?
If you are opening an account with a Forex broker offering trading in micro-lots you should start with at least $120, while if your broker (like FXTM) offers nano-lots you can start safely with as little as $12.What are the best brokers for Forex for Kenyan traders?
According to our in-depth research, the best Forex brokers in Kenya are FXTM, AVA Trade, IFC Markets, Pepperstone, and EuropeFX.Back to top ⬆