M-Akiba goes live, nets Sh1 million within first hour

Kenya has finally launched a government bond to be traded exclusively on a mobile handset, another first in financial technology that broadens opportunities for small investors.

M-Akiba went live Thursday morning with a subscription of over Sh1 million within the first hour, signifying a high appetite for the risk free investment.

Treasury Cabinet Secretary Henry Rotich, who presided over the launch of the tax-free bond, said the product is aimed at allowing many Kenyans to purchase government security and deepen financial inclusion.

“We are using it as one of the avenue for local borrowing but this is one way to allow as many Kenyans as possible to participate in Treasury Bills, promote financial inclusion and boost our infrastructure financing. The returns are better than even the current deposit rates and it is convenient to participate in using your mobile phone from wherever you are,” Mr Rotich said.

READ: M-Akiba opens the bonds market to small investors

In the initial phase of the Sh5 billion government bond, buyers are allowed to take a minimum of Sh3000 or a maximum of Sh140, 000 per day exclusively via mobile phones.

The current offer runs until 10th April or until Sh150 million is raised, with the remaining Sh4.85 billion expected to be floated in June.

Marketing drive

Treasury has also planned a marketing drive before June to popularise the bond which attracts a 10 per cent interest paid bi-annually within a period of three years when it matures.

Central Bank (CBK) Governor Patrick Njoroge also lauded the move terming it a ‘transformational and a momentous milestone’ in deepening financial inclusion.

“This will dramatically change the savings culture of our people. The success of M-Akiba is a testimony of how collaboration can democratise finance and there are many other products coming to show case Kenya as a hot bed for innovation beyond financial technology,” Mr Njoroge said.

The government, through the National Treasury, in November 2015 appointed the Central Depository and Settlement Corporation (CDSC) to provide agency services for issuance of the bond.

The CDSC is facilitating the creation of M-Akiba CDS accounts and processing of applications in the primary market.

It is also offering registrar services, as an agent of the Central Bank of Kenya, to create the register of bondholders and manage the coupon payments and redemption of the bond at the end of the three-year term.

Other players include the Capital Markets Authority as the capital markets regulator, Safaricom and Airtel as mobile network operators, and the Nairobi Securities Exchange (NSE) where the bond shall be traded and listed.