Treasury fails to launch Sh3,000 M-Pesa-based bond, again

The Treasury has once again failed to introduce the mobile phone-based bond, months after President Uhuru Kenyatta approved the law guiding the sale of the Sh5 billion mini-securities.

The government in January said it would introduce the mobile phone-based Treasury bond by the end of March after shelving the planned sale last October.

It initially planned to start selling the Sh5 billion five-year bond in October but prevailing interest rates, which had risen to 22 per cent for short-term government paper, meant that the Treasury had to suspend the offer until lower rates come into play.

T-bill rates traded at 8.965 per cent last week, offering the State an opportunity to borrow cheaply from ordinary citizens in a market hitherto restricted to high net worth investors.

The M-Akiba bond was to be sold at minimum denominations of Sh3,000 through the mobile money platform.

“There should be an element of information to tell retail investors what the bond entails what the coupon means. I think they have to embark on that journey before they actually float it to get healthy subscription,” CfC Stanbic Bank regional economist Jibran Qureishi said.

The Twitter account set up by government @m_akiba2015 last posted information about the bond on November 20. “Financial inclusion in, for example, the US where is 93.6 per cent, Germany at 98.7 per cent. M-Akiba2015 will assist push this percentages. M-Akiba is for all Kenyans so long as they have a mobile phone and some money available for investment #M-Akiba2015,” the post reads.

Treasury secretary Henry Rotich said: “Everything is ready we are just waiting for President Uhuru Kenyatta to launch M-Akiba. The rate will be slightly lower than the prevailing market rate but I will let the President make the announcement when he launches it.”