The government’s effort to further tap into the domestic money market by leveraging on mobile phones technology appears to be faltering.
The National Treasury was on Sunday forced to extend the second phase of the M-Akiba bond after it fell short of target.
The government was looking to raise Sh1 billion but by close of the sale on Friday, only Sh140 million had been realised. The sale has now been extended to September 11. Only about 235,672 people participated in the second phase.
M-Akiba was launched with the enabling Kenyans with low income buy shares on their mobile phones and earn interest while helping finance infrastructural and developmental projects, which the government says will as a result be executed at lower costs because the cost of funding for these projects will decline. The government is targeting to raise a total of Sh5 billion this year.
One can invest a minimum of Sh3,000 up to a maximum of Sh140, 000 per day with the investment earning 10 per cent interest paid every six months.
In the pilot base, which attracted 102,632 investors, the government achieved its target of raising Sh150 million.
However, the slow intake in the second base means Treasury must go back to the drawing board.
In addition to floating the Sh1 billion bond, the government had also left the door open for a Sh3.85 billion staggered on a fortnightly basis.
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But the government says the extension was informed an increased number of investors, who rushed to buy the mobile bonds in the last three days to the July 21 deadline.
“It is only right that these investors are given the opportunity to participate,” Treasury public debt management director general Wohoro Ndohho said.
However, those who had both the bond before the expiry of the deadline will not be disadvantaged since they will be paid interest of a pro rata basis.
