EDITORIAL: M-Akiba mobile phone based bonds spot on

It has been several months since the government announced plans to directly borrow from the citizens via the mobile phone.

That announcement has, however, been followed by a number of false starts mainly linked to system capacity among other challenges.

But finally, today is the D-day for the launch of what is yet another world first by Kenya in the mobile technology space. The platform is expected to elevate our use of the mobile phone to a new level and that is worth supporting.

However as all things technology go, it is our hope that its creators and handlers have taken the requisite precaution to ensure it does not become yet another avenue for the thousands of digital crooks out there to steal money from investors.

Beyond symbolism, the most important aspect of the M-Akiba product is equity. For years, domestic borrowing by the government has benefitted big corporations such as banks, and pension funds.

This is because the minimum bond investment had been set at Sh50,000 —and to make an investment, you had to go to the Central Bank of Kenya, or other intermediaries, who would claim part of your earnings.

The common man had been reduced to putting his/her money in banks where they are paid close to nothing.

Now they can fund development and crank up their national savings while at it.

With as little as Sh3,000 and in multiples of Sh100, ordinary folks can invest in Treasury bonds through M-Pesa or Airtel Money channels.

We should also expect that use of mobile platform to invest in bonds should ultimately bring down the cost of government borrowing.

While the first investors will get 10 per cent return, eventually there is a possibility of pulling this down. This means public exposure will come down and more projects funded.

At the same time, we expect banks to channel more funds in productive ventures rather than treat the Treasury as a default or borrower of first resort.

This will help spur commerce and investment as competition heats up. Let the game of investing begin.