Yesterday, the government of Kenya, through Treasury, officially launched the long-awaited mobile-based bonds auction platform, M-Akiba, and opened a new channel for investors with small amounts of cash to loan the government instead of keeping money in the bank or in their phone mobile accounts.
On the first day of the launch a number of Kenyans had lent the government over Ksh2.4 million. The issue will close on April 7, so you still have time to participate in this bond. The first tranche, which was launched yesterday, seeks to raise Ksh150 million.
Here are quick facts to help you make an informed investment in the M-Akiba bond.
- M-Akiba, will pay investors a tax-free interest of 10%, which makes it one of the highest interest rates in the market as banks pay below 5% on deposits. You will receive back original investment at maturity of three years.
- The minimum investment is Ksh3,000 and any additional amounts in multiples of Ksh100. This means you can lend Ksh3,000 today and keep topping up until it closes or the target amount is realised. Bond buyers currently pay a minimum of Ksh50,000.
- The bond is open to all mobile users registered with Safaricom and Airtel and the interest payable every six months. This makes M-Akiba more or less a fixed savings account that will pay interest twice a year.
- The three-year bond – modelled as infrastructure bond – will be the first in the world to be sold on a mobile money platform. This is expected to open up the bonds market, currently dominated by financial institutions and high-net-worth individuals, to retail investors.
- Investors will receive details of amounts invested via text message upon making payment via mobile money…interest income on M-Akiba is tax-exempt,” the bond prospectus says.
- The Treasury is expected to issue the balance of Ksh4.85 billion in June when the President will officially launch M-Akiba.
- You open a CDS account with the CBK from your phone by dialing *889# and following the prompts — and just in case you don’t get an allocation your money will be sent back to you on your M-Pesa account.
What’s your take on this new government initiative? Scroll down and leave your comment
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