advertisement
Economy

Treasury pays first M-Akiba bond interest

Treasury Building. FILE PHOTO | NMG
Treasury Building. FILE PHOTO | NMG 

The Treasury Monday paid the first interest on the inaugural bond that was bought via mobile phone in May.

The tax-free 10 per cent interest was sent to bondholders via mobile phone cash accounts like M-Pesa, marking the first payment after the debut M-Akiba bond in March 22. The interest will be paid twice annually.

About 5,692 buyers used their mobile phone money accounts to buy different chunks of between Sh3, 000 to Sh1.13 million on the bond.

A recipient, Mr Peter Kamau expressed excitement for the interest payments, but wondered why mobile phone companies deducted transaction fees for sending the interest payment to his mobile phone account.

In March, Kenya became the first country to issue a mobile phone-based bond, which does not require a bank account.

advertisement

The first tranche of the three-year infrastructure bond raised its target of Sh150 million within days and the Treasury launched the sale of the second in June.

However, the second tranche raised only Sh247.75 million, or 24.76 per cent against a target of Sh1 billion.

There was no immediate explanation for the lower demand on the latest issue, but the sale came in the midst of election campaigns ahead of an August 8 poll that has seen some businesses and investors take a wait-and-see attitude.

Kenya was betting on the mobile phone bonds to tap into a wider pool of retail investors.

Before M-Akiba only a few ordinary Kenyans bought traditional government bonds, scared off by the minimum investment of Sh50,000 and the need for a commercial bank account.

advertisement