The Central Bank of Kenya (CBK) has kicked off procurement of a new bond retail system for the mass market, a step that brings the apex bank closer to a plan that would help the Treasury ride on increased investor demand to net much-needed cash to plug budget holes.
The CBK said that it aims to roll out a digital system with a user interface, retail depository, and efficient payment and settlement features for the mass market.
“The retail bond system will provide a platform for investors to open and maintain government securities accounts, purchase government securities, remit payments, receive interest/coupon payments, and sell/rediscount their securities using their mobile phones and website,” the CBK said in a disclosure as it invited vendors to supply the new bond retail system.
The central bank manages the issuance of government debt auctions and acts as an agent of the National Treasury.
“The system will provide all services related to retail bonds, registration of investors, creation of securities, bidding, rediscount, payments processing, online access to information, including iterative enquiries from investors via mobile phones - checking of balances, maintain a detailed register of securities issued and transacted on,” the CBK said.
“The system will have a settlement application linked to the banking and Mobile Network Operators(MNO)/Service provider ecosystem for settlement of bids, rediscounts, secondary trading, interest, and redemption payments, and generation of detailed reports,” it added.
Currently, the CBK handles bond trades on a platform called DhowCSD, which allows retail investors to participate directly in Treasury bond auctions. The platform allows investors to open accounts and place bids for bonds directly through a web-based portal or mobile app.
Buyers of Treasury bills and bonds previously bought T-bills and bonds through banks before the CBK introduced the direct-window option.
Insiders said that the new retail system would run alongside the DhowCSD and make government securities more accessible to individual investors, especially those with minimal cash for investment.
The government previously piloted a bond retail platform known as M-Akiba, which was designed to raise funds for infrastructure projects while promoting financial inclusion through mobile phone-based transactions.
It allowed Kenyans to invest in government securities with a low minimum investment of Sh3,000 and earn tax-free interest paid out every six months.
M-Akiba, however, faced teething problems and did not thrive as anticipated, with critics urging for its re-engineering to make transactions simpler for small investors and remove brokers from customer visibility during registration, and use simple language that customers can understand.
Investor demand for government bonds has increased substantially over the years, piling pressure on the Treasury and the CBK to adopt efficient trading systems. For example, data by the Capital Markets Authority and analysis by the Business Daily show that in 2024, the bonds turnover more than doubled to Sh1.54trillion—signalling a huge investor appetite for the government securities.
The State has, in recent months, stepped up forays in the domestic debt market with a series of fresh and reopened government fixed income securities, infrastructure bonds (IFB), and treasury bills.
The Treasury targets to borrow Sh635.5 billion from the domestic market for the year ending June 2026, which, together with external borrowing of Sh287.7 billion, it hopes would help fill a budget deficit of Sh923.2 billion.
“Kenya will rely predominantly on the domestic market to meet its fiscal financing needs with approximately two-thirds of its financing, or just under four percent of GDP per year, from domestic sources,” global sovereign credit rating firm, Moody’s, said in a note.
In a latest activity in the domestic debt market, the Treasury on July 21, 2025, issued a Sh90 billion IFB sale for August. The issuance was a reopened 15-year IFB first sold in January 2018 and a 19-year bond first sold in February 2022.
The sale, if fully subscribed, would see the government’s borrowing from the first two issuances of the year surpass the Sh150 billion mark, having raised Sh66.6 billion in July’s oversubscribed sale of reopened 20 and 25-year bonds, which had targeted Sh50 billion.
