Kenya Launches First Mobile-only Government bond Platform – M-Akiba

Kenyans to Invest in M-Akiba Government Bond Via Mobile Money

Kenya has launched its first government bond to be offered exclusively through mobile phones this week, taking advantage of the country’s booming mobile money market, CNBC reports.

The platform, M-Akiba will also rapidly increase transaction time, with trades that previously took an average of two days made instantly via mobile. Kenya’s Treasury hopes to raise 5 billion Kenyan shillings ($47.7 million) through the bond sale.

The Treasury is initially expected to auction the first tranche (Sh150 million) of the bond that allows every individual to invest a minimum of Sh3,000 ($29.00) and any additional amounts in multiples of Sh100 ($0.97).

Only two mobile operators, Safaricom and Airtel have been chosen to act as placing agents and they will be paid commission at the rate of 0.1% of actual sales (at cost) net 5% withholding tax.

Throughout the process, we have kept our eyes on the ultimate target: promoting financial inclusion in Kenya,” Mr. Geoffrey Odundo, CEO, NSE said in the report, “

The M-Akiba bond will enable an entirely new group of investors to access Government debt securities via their phones, which will undoubtedly drive up the national savings rate.

About M-Akiba:

M-Akiba is a Kenyan Government issued retail bond.

It’s a mobile traded bond and all activities relating to registration, trading, the settlement will be via a mobile platform. The target Amount is Ksh. 5 Billion. ($48 million)
Initial minimum investment amount per account is Ksh. 3,000 ($29.00), with consecutive trades open for any amount.

Maximum investment per account per day is Ksh. 140,000 ($1,3500). Tenure of Bond is 5 years and the coupon for the bond is payable semi-annually after every 6 months. The bond is tax-free as provided for under the Income Tax Act.

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 principal amount and coupons (interest from the bond) will be paid through M-PESA.

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Mac-Jordan Degadjor

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