Kenya's innovative mobile phone-based bond M-Akiba has raised far less than the Sh1 billion targeted, failing to match a previous success.
In March, Kenya became the first country to issue a mobile phone-based bond, which can be bought by phone users without the need for them to have a bank account.
Investors can use mobile phone networks' financial platforms like M-Pesa to send money and receive interest payments on the M-Akiba bonds, which can be traded in the secondary market.
Kenya's first such three-year infrastructure bond raised its target of Sh150 million within days and it launched the sale of the second tranche last month.
However, the second tranche had raised only Sh128 million by midday on Friday, the finance ministry told Reuters, without offering more details.
Conventional bond market
Kenya has a vibrant conventional bond market, which the government relies on to raise the bulk if its financial borrowing requirements, but it is pushing through mobile phone bonds to tap into a wider pool of retail investors.
Only a few ordinary Kenyans bought traditional government bonds, scared off by the minimum investment of 50,000 shillings and the need for a commercial bank account.
Investors can buy the M-Akiba bond for as little as Sh3,000, earning a tax-free interest of 10 per cent.
There was no immediate explanation for the lower demand on the latest mobile phone bond, but Kenya is 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.