In an increasingly digitized world, the financial landscape is continuously evolving, and innovative platforms are emerging to offer unique investment opportunities. One such opportunity in Kenya is the ability to purchase shares using Bonga points at the Nairobi Stock Exchange.
Bonga points, a loyalty program offered by Safaricom, allow users to accumulate points by using Safaricom’s services. Introduced in 2016, Lipa Na Bonga revolutionized the way customers can utilize their points, allowing them to conveniently redeem and utilize them for various transactions across the country.
With this innovative feature, Safaricom customers gained the ability to pay for goods and services at Lipa Na M-PESA merchants nationwide, leveraging their accumulated points.
In addition to making purchases, customers also gained the flexibility to settle utility bills for services such as Home Fibre, PostPay, KPLC, GOTV, and DSTV. Furthermore, Lipa Na Bonga expanded its scope to include essential payments towards NHIF and NSSF dues, providing customers with even more opportunities to benefit from their loyalty rewards.
By leveraging this program, individuals can venture into the stock market with a non-conventional approach.
In this blog post, we will guide you through the process of buying shares using Bonga points, helping you explore this fascinating investment avenue and potentially diversify your portfolio.
Understanding Bonga Points & the Nairobi Stock Exchange
Before delving into the process of buying shares using Bonga points, it’s crucial to understand the two key elements involved: Bonga points and the Nairobi Stock Exchange (NSE).
Bonga Points: Bonga points are a loyalty program introduced by Safaricom, the leading mobile network operator in Kenya. Users accumulate Bonga points by engaging with Safaricom’s various services, such as making calls, sending SMS, or using mobile data. These points can then be redeemed for various products and services, including airtime, gadgets, and even investments like shares.
Nairobi Stock Exchange (NSE): The Nairobi Stock Exchange is the principal securities exchange in Kenya, providing a platform for the buying and selling of shares, bonds, and other securities. The NSE plays a crucial role in facilitating investments and promoting economic growth in the country.
Accumulating Bonga Points
To begin the journey of buying shares using Bonga points, you must first accumulate a sufficient number of Bonga points.
To enroll for Bonga Points services, simply dial *126# and follow the prompts.
You will receive a confirmation SMS once enrolled and you automatically get 10 FREE POINTS.
If you register your personal information when enrolling to Bonga, Safaricom will automatically reward you with 30 FREE POINTS.
You can register your personal information at any Safaricom Retail Centre or through Safaricom’s Customer Care service
To accumulate engage with Safaricom’s services, including making calls, sending SMS, using mobile data, or paying bills using M-Pesa. Each transaction earns you Bonga points.
Opening a CDS Account
Once you have accumulated a sufficient number of Bonga points, the next step is to open a Central Depository System (CDS) account. The CDS account is a prerequisite for trading shares on the Nairobi Stock Exchange. Here’s how to open a CDS account:
Select a Stockbroker: Choose a licensed stockbroker who will act as an intermediary between you and the NSE. Conduct thorough research and select a reputable and reliable broker.
Gather Required Documents: Prepare the necessary documents, which typically include your identification documents, proof of address, and bank account details.
Visit the Stockbroker: Make an appointment with your chosen stockbroker and visit their office to submit the required documents. The stockbroker will guide you through the account opening process.
Receive CDS Account Number: Once your application is approved, you will receive a CDS account number. This number will be your unique identifier for trading on the NSE.
Redeeming Bonga Points for Shares
After opening a CDS account, you can now proceed to redeem your Bonga points for shares. Here’s how:
Select a Brokerage Firm: Choose a brokerage firm that accepts Bonga points as a form of payment for shares. Safaricom provides a list of authorized brokers who participate in this program.
With ten already activated. These include NCBA Capital, Faida Investment Bank, AIB-AXYS, ABC Capital, Old Mutual Securities, Kingdom Securities, Suntra Investments, Francis Drummond & Company, Dyer & Blair Investments and Sterling Capital LTD
Contact the Broker: Get in touch with your selected broker and communicate your desire to acquire shares using Bonga points. Furnish them with your CDS account number and engage in a conversation regarding the particular shares you intend to purchase. If the broker offers an online share trading service, you can proceed with the necessary procedures through their online platform.
Confirm Bonga Point Balance: Ensure that you have sufficient Bonga points to cover the cost of the desired shares. Your broker will be able to assist you in calculating the Bonga point equivalent of the shares you want to purchase.
Execute the Transaction: Once you have confirmed your Bonga point balance, the broker will execute the transaction on your behalf. They will deduct the corresponding Bonga points from your account and credit the shares to your CDS account.
Here is a step-by-step guide on how to buy shares with Bonga Points
Dial *126# (Or use mySafaricom App, under Balances, Lipa na Bonga)
Go to Lipa Na Bonga Sub-menu on USSD Code
Select PayBill Option
Key in the Trading Participant’s PayBill Number
Then enter your CDSC (Central Depository and Settlement Corporation) account number
Then enter the amount in KES they want to deposit to their account number.
Customers will redeem their points at a rate of Ksh. 1 for every 5 points. So for example Ksh. 100 will require 500 Bonga Points.
Investing in shares using Bonga points offers an exciting opportunity for individuals to enter the stock market in a unique way. By leveraging the loyalty program offered by Safaricom, you can accumulate points and diversify your portfolio through the Nairobi Stock Exchange.
Remember to accumulate sufficient Bonga points, open a CDS account, and choose a reputable brokerage firm that accepts Bonga points as a form of payment. With careful research and consideration, you can make informed investment decisions and potentially reap the benefits of this innovative approach.
However, as with any investment, it is important to exercise caution, conduct thorough research, and seek professional advice when necessary. Embrace this new investment avenue, harness the power of Bonga points, and explore the exciting world of shares at the Nairobi Stock Exchange.
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