The Kenyan government has announced that it will float a Government bond that will be offered exclusively to mobile money users. The initiative, dubbed as M-AKiba, will see bonds being paid for by M-PESA.
The trades on M-Akiba will be limited to an upper limit of Ksh. 140,000 a day until the bond offering period ends. The bond will be launched in three weeks.
Henry Rotich, Cabinet Secretary, National Treasury had this to say about the bond. “In three weeks over 32 million Kenyans will have the potential to participate in a Kshs. 5 billion Government bond. This historical development is testament of our commitment to embrace innovation to democratize the uptake of government securities. Over the years, 98 percent uptake in government bonds has been by institutional investors, with only two percent going to individual investors- and this has left out many Kenyans from participating in raising funds for nation building”
To invest in the bond customers will need to have a valid ID, dial *889# and follow the prompts. Upon maturity of the bond, the principle amount and coupons (interest from the bond) will be paid through M-PESA.
- M-Akiba is a Kenyan Government issued retail bond.
- It’s a mobile traded bond and all activities relating to registration, trading, settlement will be via a mobile platform.
- The target Amount is Ksh. 5 Billion.
- Initial minimum investment amount per account is Ksh. 3,000, with consecutive trades open for any amount.
- Maximum investment per account per day is Ksh. 140,000.
- Tenure of Bond is 5 years.
- Coupon for the bond is payable semiannually- after every 6 months.
- The bond is tax-free as provided for under the Income Tax Act.