M-Akiba, a Government issued retail bond aimed to enhance financial inclusion for economic development.
The M-Akiba bond was launched in March 2017 where Kenyans had a chance to lend the Government as little as Sh3,000 to help fund infrastructure projects but failed to hit sh1 billion target.
Government promised investors a 10 per cent interest payable twice a year and pay back the principal upon maturity in 2020.
Treasury, Central Bank of Kenya (CBK), Nairobi Securities Exchange (NSE), Central Depository and Settlement Corporation (CDSC), Safaricom and Airtel were the main stakeholders.
The Government only managed to raise Sh247million in the project that ended on Friday, September 8.
Here are some reasons why Treasury failed to hit the Sh.1 billion target:
1. Poor marketing
Major stakeholders CDSC, NSE, and CBK did not participate in publicising the project that geared towards raising funds for infrastructure projects by the Government.
2. Political project
The launch was to be part of Jubilee Party’s manifesto launch dimming it to a political project but Treasury tried to convince Kenyans that the bond was meant to promote a saving culture within the country.
3. Supreme Court ruling
Supreme Court judgement which annulled presidential election on September 1 was another blow to the project. Politics have since taken a centre stage, preoccupying the investors.
Banks with huge financial base had been targeted to sell Government securities which don’t carry the risk of default as opposed to commercial loans. 26 banks signed up to their shared switch, PesaLink, which was to allow customers buy up to Sh999,999 worth of bonds but only 18 banks made the service available to customers.