So, what is M-Akiba and how does it work?

Kenya last week made headlines all over the world when it launched the first of its kind mobile-only government bond.

After more than two years of postponing it, the ministry of Treasury finally unveiled, M-Akiba at a low key event held in Nairobi.

The launch that was done last week is but a pilot program with an initial offer of $1.5million and will close on April 10.

A bigger launch targeting to raise Sh4.85 billion bond is planned for June and will be officially be opened by President Uhuru Kenyatta.

Also read: Sold out; how Kenyans bought $1.5 million worth M-Akiba government bond in a record 13 days

Long story short, how does M-Akiba work and who can take their rightful place in history by trading in it? Here is how.

Requirements.

Process

M-Akiba is easy to use, the first step is dialing *889# on your handset and following simple steps to open a CDS account. The process is such that one will be directed on the registration process and all the necessary Central Bank of Kenya guidelines of Know Your Customer (KYC) verified in three or less simple steps.

The good news is any phone can access this process be it a smartphone or a simple feature phone.

Note you cannot be allowed to hold two CDS accounts or register twice. One CDS account, one registered mobile money transfer number.

Once the registration is complete and upon going live, an individual will be required to then use the $30, earlier loaded to trade in the first world’s mobile bond.

In M-Akiba there are no lots like in other bond issues, the maximum amount an individual will be allowed to trade is $1400 (Sh140, 000) a day in line with central Bank guidelines on Mobile Network Operators (MNOs) money transfer platforms.

M-AKIBA will attract a 10% coupon rate also known as interest.

Payments of interest or coupon on M-AKIBA will be made twice a year and directly to MPESA or Airtel money. So for instance if you traded with $30 upon maturity of the bond after 6 months you will get your principal back ($30+ interest earnings of 300 for every 6 months you waited.

M-AKIBA will also not attract price variations. An individual will be able to buy or sell an M-AKIBA anytime through market makers (brokers, investment banks fund managers among others).

Any secondary buying or selling will be subject to availability of the same while any individual who wishes to off-load M-AKIBA upon purchase will find a ready market and will incur mobile money transaction costs only.