Government Rolls out Historic M-Akiba, Realizes KES 2.4 Million on Day One

The Kenyan government made history with its roll-out of the M-Akiba special bond which requires a minimum investment of 3,000 Kenyan shillings.

The government officially opened the sale of the tax free mobile infrastructure bond yesterday with an initial target of 150 million at a fixed coupon rate of 10 percent. On the first day of its roll out, the Treasury had already sold bonds worth 2.4 million shillings to more than 1700 investors. The system, however, slowed down in the course of the day seemingly after being overwhelmed by the large number of subscriptions although the Treasury has assured Kenyans that the issue has been rectified.

Two mobile operators, Safaricom and Airtel have been chosen to act as agents with a payment of 0.1 percent commission of the actual sales (at cost) net of five percent withholding tax.

For years the government has been issuing treasury and infrastructure Bonds with a minimum investment of 50,000 Kenyan shillings. With M-Akiba, the first of its kind in the world, most Kenyan investors will be able to afford compared to the initial investment of 50, 000 shillings.

Through the M-Akiba bond, Kenya has redefined how to increase financial inclusion among the unbanked populace, increase the level of democratization at the bond market by allowing both low income earners and high net worth individuals to trade in government bonds and spur and give momentum to the savings culture,  said Henry Rotitch, Treasury Cabinet Secretary during the launch.

The M-Akiba bond retails at a minimum of 3,000 shillings to a maximum of 140, 000 shillings a day. The nature of the bond attracts a 10 percent interest which will only be paid twice a year (tax free) for a period of three years after which it matures.

This project targeted the general population with an eye on the citizens between the age of 24-39 years both in the urban and rural areas with irregular sources of income but who are looking for alternative avenues to invest and save.

M-Akiba bond can be traded by any Kenyan citizen with a registered mobile handset for money payment services after opening an M-Akiba CDS account through dialing *889#.

This initiative is a collaboration of various entities; National Treasury, Central bank of Kenya, Capital Markets Authority, Safaricom and Airtel, National Security Exchange, CDSC,KASI and the Kenya Commercial Bank.                                                        

Related: How to Invest at the Nairobi Securities Exchange