M-Akiba Treasury bond, a mobile-based platform where small-scale investors can invest in Kenya government bonds is going live on Thursday.
M-Akiba proceeds will be invested in infrastructure projects in Kenya. However, the deployment of this mobile-first, mobile-only government bonds exchange system will undoubtedly lead to intense cash deposits competition between the government, banks, and SACCOS.
The Central Depository & Settlement Corporation will issue a Ksh. 5 billion 3-year bonds on behalf of the Treasury in tranches. The first tranche will be Ksh. 150 million. The minimum investment amount per investor is set to Ksh. 3,000 and additional amounts can be obtained in multiples of Ksh. 100. Interest will be paid every six months through mobile money services. The Treasury says the remaining Ksh. 4.85 billion will be issued within the second and third quarter of this year.
Investors looking forward to taking part in the M-Akiba investment must be registered mobile users of the two leading mobile service carriers Safaricom and Airtel. The sale of the government bonds via M-Akiba kicks off tomorrow Thursday, March 23rd to April 10th 2017. After that, it will be listed on the Nairobi Securities Exchange (NSE).
In part, the prospectus reads: “The bond will be listed on the Nairobi Securities Exchange and will be traded on the secondary market via mobile phones commencing April 11th.”
The deployment of M-Akiba is likely to disrupt the financial market, especially since small depositors deposit their little sums in low interest earning accounts provided by banks or mobile money wallets. Previously, these small-scale investors were barred from lending to the government given the restrictive minimum purchase amount of Ksh. 100,000 and Ksh. 50,000 for the Treasury Bills and Bonds respectively.
The idea of M-Akiba first reached the public in October 2015, but its launch has been postponed several times as the Treasury worked out the logistics of trading on the secondary market (NSE).