Government to sell Treasury Bonds to ordinary Kenyans via mobile phones

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The government has opened treasury bonds to mobile users through a new platform; M-Akiba a development that points to the growing relevance of mobile money solutions in the evolving e-payments space.

M-Akiba in conjunction with Safaricom will give over 23 million Kenyans the capacity to participate in a 5 Billion Government Infrastructure Bond. Previously, individual investors were only entitled to 2 percent uptake of government bonds and 98 percent going to institutional investors.

To participate in the Save Money, Make Money, Build Kenya” bond, potential customers will only 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) that will be paid through M-PESA.

The bond uptake to take off in three weeks is a continued push to take to deepen access for retail bond trading, which was previously only accessible to commercial banks or traders.

As part of this effort, the Treasury recently lowered the cost of government bonds from Kshs. 50,000 to just Kshs. 3,000. Through the mobile-phone based M-Kiba solution, trades can reach an upper limit of Kshs. 140,000 per day until the bond offering period closes.

“This development signals the continuing transformation that mobile money can deliver to boost efficiency in government revenue collection while providing more access for Kenyans. M-Akiba is yet another innovative application that will help more people save and invest, while making it faster for the government to raise funds,” said Stephen Chege, Director – Corporate Affairs, Safaricom.

Previously, purchasing bonds took at least two days in a process that required customers to apply for a bond CDS Account, take forms to Central Bank of Kenya. The new platform will fasten the process that will now be instantaneous.

M-Akiba has also been designed to help Kenyans grow their saving culture that has recorded low percentage in the East African region; only 11% of Kenyans save on a regular basis as compared to 22% in Rwanda and Uganda, while in Qatar this figure stands at 60%.”

 

 

 

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Melissa Daniels
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