Starting from the bottom, the Forex market has become the most preferred and accessible trading area in the world. The change in the trading volume is tremendous everywhere, but one area obviously performed better than the others. Forex trading in Africa exploded by 477% between March 2020 and July 2020 and the ratio keeps rising. According to the estimates, there are 190.000 local traders only in South Africa. Nigeria has 200.000 traders and the total number of traders in Africa is 1.3 million. To meet the increasing demand in the Forex market, there are a lot of people considering how to become a Forex broker and if they can survive in the African Forex market. It can be clearly said that the expectations would be higher than survival and you can turn into one of the leading actors in Forex brokerage business. There are some reasons why starting a Forex broker in Africa is more sensible than ever.
Increasing Credibility with Strong Regulatory Framework
In 2018, 71% of African people stated that they do not have any trust in the Forex market and they believe that they would be scammed by local brokers. The picture has changed drastically since then and the ratio becomes %44 in 2020. Stronger regulatory bodies played a huge role in that drop by creating a trusted platform. The FSCA, the successor to the Financial Service Board (FSB), is the most reputable license issuer in Africa and they are doing a great job by regulating over 1000 registered financial entities. Considering the fact that obtaining a license usually requires a high level of budget but it is 5 times cheaper in South Africa than in the USA and other level jurisdictions, South Africa looks more and more attractive to those who see an opportunity with the help of increasing credibility and trust in local traders. To find the most suitable license option for your broker, you can visit Qinox Tech’s website. Besides licensing, the company offers technological solutions and can guide you to establish your company.
The Lack of Forex Brokers Specialized in African Forex Market
There are lots of foreign Forex brokers that entered into African Forex market in the past years, but their services do not solely focus on African traders which allow the local Forex brokers to jump onto the stage. They usually do not have any office in Africa, so you cannot receive any response for a long time if you need some support. For example, Exness, one of the best-rated Forex brokers in South Africa, gives a response to a call in 12 hours, which is a very long period of time considering the dynamics of the Forex market. Another leading actor in Africa, Tickmill allows no ZAR Trading accounts. The local traders cannot enjoy the flexibility of making transactions in their own currency. If you create a Forex account in Hotforex, a foreign player also operating in South Africa, you cannot use local banks for deposits or withdrawals. The only available method is wire transfer, and this method can take 2-7 days to be credited. These inefficiencies lead a path to thrive in the Forex market for those who are familiar with the financial conjuncture of Africa and the need of local traders.
Increasing Number of Forex Technology Companies
To start a Forex brokerage business, experience and knowledge seem to have the highest level of importance. As a newcomer, you may not possess all the details in the Forex business, such as Forex risk management and differences between Forex CRM providers. If you considered establishing a Forex broker in Africa several years ago, you would not have survived in the pile of details, since there were not any Forex technology companies that give you consultancy and support. Today, there are lots of Forex technology providers seeing African market as the most promising Forex trading area and channelling their effort into that market. While collecting the data from African agencies and combining them with their business history, Qinox Tech shines as the most prominent Forex technology company by bringing turnkey Forex solutions to the table. Get in touch with Qinox Tech for more information and help to thrive in Forex business.