M-Akiba misses Sh500m target, gains new accounts

The Treasury’s mobile-based bond, M-Akiba, that was reopened mid last month has raised Sh263 million, falling short of the targeted Sh500 million.

The selling agents, the Central Depository & Settlement Corporation (CDSC) and the Nairobi Securities Exchange (NSE) said in a statement Thursday the bond attracted additional 51,461 new accounts, bringing the total M-Akiba accounts to 565,725.

“A total of Sh263.6 million was raised against a target of Sh500 million, the highest amount raised during the Primary Market Offer,” they said.

“The total amount raised to date crosses the Sh1 billion mark to stand at Sh1.045 billion.”

A total of 11,239 investors also received their periodic interest payments of Sh31.39 million yesterday, bringing the total amount paid out in interest to Sh98.56 million since the first issuance in 2017.

The infrastructure bond has its minimum subscription set at Sh3,000, meant to make it accessible to the masses, unlike normal Treasury bonds that have a minimum subscription amount of Sh50,000.

Infrastructure bonds, which are tax-free like M-Akiba, require a minimum initial investment of Sh100,000.

The bond pays investors a tax-free 10 percent interest —higher than the current 9.52 percent paid by the one-year Treasury bill, which also attracts a withholding tax on the interest.

M-Akiba seeks to deepen financial inclusion through leveraging on increased mobile phone penetration.

CDSC says that two thirds of all government bond investors on the M-Akiba platform are taking up less than Sh20,000 worth of securities.

The government has so far floated offers worth Sh1.88 billion on the M-Akiba bond programme, inclusive of the latest sale.

The redemption date of the M-Akiba bond is September 7, 2020. Previous sales of the bond include the Sh150 million pilot offer in March 2017, the debut sale of Sh1 billion in June 2017, and two re-openings of Sh250 million each in February and May.