Kenya’s mobile bond, M-Akiba sells out in 13 days

Treasury Cabinet Secretary Henry Rotich (left) and NSE Chairman Eddy Njoroge (right) being taken through the process of buying the M-Akiba bond. [PHOTO/ JONAH ONYANGO/STANDARD]

NAIROBI: The sale of the mobile phone-based Government bond M-Akiba closed Tuesday afternoon after Kenyan investors put in Sh150 million to fully subscribe to the bond.

The sale, which opened on March 23, closed ahead of the April 10 date it was scheduled to end following high demand from investors. According to the National Treasury, over 100,000 investors had registered to invest in the bond but only a small fraction made actual purchases.

“The bond attracted 102,632 investors... however, out of these, only 5,000 or five per cent of these actually made the purchases of the bond,” said Treasury. The bond, which is largely expected to open up lending to Government by common Kenyans, attracted different investors who put in varying amounts over the 13 day period that the bond was on sale.

Larger bond

According to Treasury data, the average M-Akiba investment was Sh20,000 with investments ranging from Sh30,000 (lowest by a single investor) to Sh1 million (highest). Over 94 per cent of the money was transacted through Safaricom’s mobile money platform M-Pesa (Sh142 million) while the rest was through Airtel Money (Sh8 million).

The three year tax-free M-Akiba bond has an annual interest rate of 10 per cent. Investors were required to put in a minimum investment amount of Sh3,000 and a maximum investment of Sh140,000 per day.

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The just-concluded offer is a precursor of a larger bond that Treasury plans to float later this year, where it plans to raise Sh4.85 billion in a similar manner.

Last week, Treasury Cabinet Secretary Henry Rotich said the main M-Akiba bond would be launched in June by President Uhuru Kenyatta. The money raised from the sale of the bond will be invested in infrastructure projects.

Through the minimum Sh3,000 subscription for the bond, the Government is further opening up the capital market.