Last month saw the launch of the much-awaited M-Akiba mobile retail bond, the world’s first mobile government bond, at the National Treasury building. The mobile-based bond finally began trading on 23rd March after being postponed time and time again since its introduction in October 2015.
The National Treasury issued the three-year mobile-based bond with an initial target of Sh150 million in its pilot stage. Unlike in the past whereby the government would issue treasury bonds with a minimum investment of Sh50, 000, it now offered a minimum investment of Sh3, 000 making it more affordable to every Kenyan to partake in the investment. An individual will be allowed to bid up to Sh140, 000 per day for the bond.
“This product is for a mama mboga, farmer, employee, hustler or whatever,” the Treasury said in a press release.
The mobile based bond will be opened till the 10th of April and for those lucky enough to have invested will be earning an interest rate of 10% every six months for the next three years. This will be much better than saving in banks whereby you can only earn up to 7% on your deposit.
The government opened the bond to only two mobile operators’; henceforth only individuals who are registered with Safaricom’s M-Pesa and Airtel money are allowed to invest in the government bond. At the end, the two agents will be getting a commission of 0.1% of the actual sales net 5% withholding tax.
In order to start investing, Kenyan citizens will have to first open up an M-Akiba CDS account by dialing the ussd code *889# on their phones.
The bond is tax free however investors will have to part with a cost of 0.035% of their total investment which acts as a commission to the capital markets participants which include the Central Depository and Settlement Corporation, Capital markets Authority, the Investor Compensation Fund and Nairobi Securities Exchange.
This being a pilot phase, the government plans to put up the main offer that will have a target of Sh4.85billion during the second or third quarter of 2017.
