Importance of Capital Markets in Economic Growth

Capital markets are essential for:

• Mobilizing domestic savings: Directs household and institutional savings into productive investments.
• Facilitating capital formation: Enables companies to raise funds for expansion, innovation, and job creation.
• Enhancing financial inclusion: Through tools like mobile investing and affordable share offers.
• Improving transparency and corporate governance: Publicly traded firms must adhere to reporting and compliance standards.
• Supporting government infrastructure: Through bond issuance and securitized debt.

Example:
Safaricom’s listing on the NSE enabled it to raise capital from everyday Kenyans and institutions, fueling its dominance in telecom and mobile money.