Kenya pulls another world's first, unveils the first mobile bond, M-Kiba

On Thursday at a low key event held at Treasury Building, M-Akiba went live for the first time after being post phoned for two years.

Flash forward ten years down later, Safaricom’s mobile money transfer service, MPESA has soared to Sh5.2trillion as of March 2016; the highest deal value since March 2007 when it handled Sh10.3million.

As of the end of December 2016, M-PESA served close to 29.5 million active customers through a network of more than 287,400 agents in the ten countries where Mpesa is used, and 6 billion transactions were processed in 2016 alone, peaking in December 2016 at 529 transactions every second.

Kenya is at it again, launching another world’s first financial technology M-Akiba, the first of its kind mobile-only government bond.

Any Kenyan who owns a mobile phone and armed with a minimum of $30, handsets operational skills and has a registered mobile payment system will now be able to buy  treasury Bills and Bonds, no where in the world has such a feat been attempted.

Compared to the minimum of $500 individuals had to spend previously to buy government bonds, this is a game changer and Kenya is on another lap of glory.

“It has required a lot of collaboration of many teams working long and hard and in a sense this is why this product has taken so long to be launched. Frankly, if this is not transformational, I don’t know what is,” Central Bank of Kenya Governor Dr Patrick Njoroge said.

By 4pm, a total of $240 thousand had been collected from 1,720 investors from the $1.5million in the initial phase to test investor appetite the government had offered.

“There has been an overwhelming demand for M-Akiba bond, the traffic for registration and purchase was beyond what had been expected. Due to the overwhelming response, any delays in subscription is currently being rectified to accommodate the high number of investors,” M-Akiba said on its official twitter handle.

Contrary to common belief, one does not need to have a smart phone to register. The inter-phase has been designed such that a simple ordinary phone with limited screen display such as ‘mulika mwizi’ works just fine.

At the moment we are relying on savings from outside because Kenyans are not saving so we have given you a product hoping you will start saving from now which is very good for the economy,” Treasury Cabinet Secretary Henry Rotich said during the launch of the bond.

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

The tax free M-Akiba bond attracts a 10 percent interest paid to investors over its three year tenor.

The bond however isn’t just about offering encouraging Kenyans to save. The Kenyan government is diversifying on its dependence on foreign aid and therefore needs a new pool of cheap money to finance large infrastructure projects envisioned in Vision 2030 and an upcoming general election.

Payments of interest or coupon on M-AKIBA will be made twice a year and directly to MPESA or Airtel money.

The government plans to collect a total of Sh5 billion from the M-Akiba bond.

The bond would be on offer until April 10 or until the $1.5million is raised.

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