Treasury yet to pick launch date of mobile-based bond
Treasury Secretary Henry Rotich. PHOTO | FILE
What you need to know:
The M-Akiba bond will be sold at minimum denominations of Sh3,000 through mobile money platforms. Individuals can bid a maximum of Sh140,000 for the income tax-free bond.
The Treasury is yet to settle on a date for introducing the much-awaited mobile phone-based bond dubbed M-Akiba four months after it was supposed to be launched.
President Uhuru Kenyatta last year signed a law guiding the sale of the Sh5 billion mini-securities but the Treasury has failed to issue the low-denomination bond targeting the common man, at one point citing higher interest rates.
“We will give a date shortly once a few issues are sorted,” Treasury Secretary Henry Rotich said without elaborating on Monday in response to our queries.
The government in January said it would introduce the bond by the end of March after the planned sale in October last year was derailed by volatile interest rates. The bond targets cheap borrowing by expanding subscription from traditional institutional investors.
Electronic account
The M-Akiba bond will be sold at minimum denominations of Sh3,000 through mobile money platforms. Individuals can bid a maximum of Sh140,000 for the income tax-free bond. Potential investors will only need a mobile phone line and subscription to a mobile money transfer service, which will enable telcos to open an electronic account with the CDSC on their behalf.
The Treasury is supposed to pay the coupons every six months through the mobile platforms. The Treasury initially planned to start selling the Sh5 billion five-year bond in October but interest rates had risen to 22 per cent for short-term government paper.
Kenyans have eagerly awaited an opportunity to participate in the ‘‘risk-free’’ paper that is out of reach for many with its current minimum investment requirement of Sh50,000.
Banks and statutory bodies in Kenya take up the most of government and corporate debt, meaning that the level of individual investment is limited. The mobile platform will potentially see over 23 million Kenyans participate in the bond. Individuals will also enjoy instantaneous purchase of Government bonds.
