Every cloud has a silver lining. In 2008, bank liquidity shortages that resulted from the oversubscribed Safaricom initial public offer (IPO) and to an extent the preceding IPOs, namely, Kenya Re and KenGen, inadvertently helped birth the horizontal repurchase agreement market - the market through which lenders borrow and lend from each other by offering government securities as collateral.
However, owing to a legal obstacle surrounding ownership of title, the market has remained more or less inactive. But thanks to recent reforms, data from the Central Bank daily interbank lending activity reports show a resurgence of the horizontal repo market.
