Kenya goverment’s M-Akiba bond to be launched this week




After almost 2 years of planning, the government is finally set to launch the M-Akiba bond this Thursday March 23, 2017 at the Treasury headquarters as a special limited offer according to an announcement on the M-Kiba Facebook account.

The launch will be officiated by Treasury CS Henry Rotich. Others expected to be present include representatives from Central Bank of Kenya (CBK), the Capital Markets Authority (CMA), Safaricom, Airtel Kenya, Nairobi Securities Exchange (NSE), Central Depository and Settlement Corporation (CDSC), Kenya Commercial Bank (KCB) and the Kenya Association of Stockbrokers and Investment Banks (KASIB).

The launch will be the culmination of a process which began in mid 2015 when the National Treasury announced plans to float the first-ever Government Bond to be offered exclusively via mobile phone, pointing to the growing relevance of mobile money solutions in the evolving payments space.

The bond, known as M-Akiba, was to be delivered in partnership via Safaricom’s M-PESA to continue a push that seeks to deepen access for retail bond trading, which was previously only accessible to commercial banks or traders.

“In three weeks over 23 million Kenyans will have the potential to participate in a Kshs. 5 billion Government Infrastructure Bond. This historical development is testament of our commitment to embrace innovation to democratize the uptake of government securities,” said CS Henry Rotich in a media statement issued in September 2015.

Said Rotich: “Over the years, 98 percent uptake in government bonds has been by institutional investors, with only two percent going to individual investors- and this has left out many Kenyans from participating in raising funds for nation building”.

Previously, it took an average of two days to buy a government bond in a process that required customers to apply for a Bond CDS Account, take forms to Central Bank of Kenya, and deposit funds with a broker. M-Akiba however makes the process instantaneous.

“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, Safaricom’s Corporate Affairs Director in the same release.

To invest in the the then upcoming Kshs 5 billion, which had been dubbed “Save Money, Make Money, Build Kenya” bond, potential customers were to have a valid ID, dial *889# from their Safaricom lines and then follow the prompts. Upon maturity of the bond, the principle amount and coupons (interest from the bond) that will be paid through M-PESA. It is yet unconfirmed whether these terms still remain the same.




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