Kenya’s National Treasury to float Ksh5billion bond via mobile phone
The National Treasury of the Kenyan Government has announced plans to float Ksh5billion Government Infrastructure bond exclusively via mobile phone.
The bond will be traded through the mobile phone-based M-Akiba platform and will be delivered in partnership with Safaricom’s M-PESA in a bid to deepen access for retail bond trading, which was previously only accessible to commercial banks or traders.
With the M-Akiba platform, the purchase of the bonds are instantaneous as opposed to the previous method, where customers’ will have to apply for a Bond CDS Account, take forms to the Central Bank of Kenya and deposit funds with a broker – this process takes an average of two days.
To make bonds accessible to all Kenyans, the National Treasury recently reduced the costs of government-issued bond from Ksh50,000 to Ksh3,000 and through the M-Akiba mobile platform, trades can reach an upper limit of Ksh140,000 per day until the bond offering closes.
Cabinet Secretary, National Treasury, Henry Rotich said, “In three weeks over 23 million Kenyans will have the potential to participate in a Kshs. 5 billion Government Infrastructure Bond. This historical development is testament of our commitment to embrace innovation to democratize the uptake of government securities.”
Delivering the bonds through M-Akiba demonstrates the growing importance of mobile phones in transforming the financial sector of the economy and is a way of ensuring that the ordinary Kenyan citizens, who have over the years been left out of such offerings because of the cumbersome process involved, participate in fundraising for nation building.
To invest in the five year infrastructure bond, dubbed “Save Money, Make Money, Build Kenya”, interested Kenyans will only need to have a valid ID Card, dial *889# and follow the voice prompt, and upon maturity of the bond, the principle amount and coupons will be paid through M-Pesa.