The Forex market has become the most preferred and accessible trading area in the world. Especially during the pandemic, many brokers all around the world have drawn a great picture, 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 the Forex brokerage business.
If you have second thoughts about how you can start and run a successful brokerage business, it’s time to find a reliable forex service provider. Qinox Tech is an experienced fintech and consultancy company with numerous customers in the continent. With their expertise in various parts of Africa and expanding customer portfolio, they have improved on and perfected turnkey forex solutions in a way that can boost brokerage business models without limits. Of course, their service became meaningful thanks to the structure of the African market. Below, you can find some tips about the African market and how it turns out to be the most appealing option in the Forex market.
In this article
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 ofSouth Africa (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.
Besides, one most preferred license option for the African brokers is the one issued by the Financial Services Commission of Mauritius, which offers more tax advantages and greater leverage flexibility. The key requirements for an applicant company are also easily achievable for African investors such as opening a local office in Mauritius.
Obtaining a license can require forex entrepreneurs a lot of paperwork and legal duties. However, an experienced service provider can help you get regulated without spending too much effort. Qinox Tech has been providing consulting service for new forex brokers and professionals in different countries of the continent to deal with regulation processes for various financial authorities including South Africa FSCA License and Financial Services Commission of Mauritius. Those who want to start a regulated broker in Kenya, South Africa, Nigeria or any other part of the continent can now benefit from the lower costs and effortless banking and licensing process.
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. This disparity allows 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 demand of local traders. If you already think that you know the market but cannot decide the best option for a fresh start, Qinox Tech team can clear the path for you by providing the perfect consulting service while answering the questions in your mind.
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 the African market as the most promising Forex trading area and channeling their effort into that market. While collecting the data from African agencies and combining them with our business history, the Qinox Tech family won our spurs as the most prominent Forex technology company by bringing turnkey Forex solutions to the table.
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