The mobile phone traded government bond dubbed M-Akiba has issued a re-open 3, increasing the previous target set for Kenyan investors of the retail bond. With M-Akiba re-opening on August 19, investors will now be targetted to raise Ksh500 million, double the amount set during the previous re-open.
M-Akiba reopen 2, which was issued on May 27, had targeted Ksh250 million from Kenyan investors.
According to a prospectus of the new issue of the three-year retail bond, investors can purchase the tranche between August 19 and September 9. The M-Akiba Reopen 3 is thus set to be listed and begin trading on the Nairobi Securities Exchange (NSE) as from the day after the application closure. “The bond will be traded on the NSE via mobile phones commencing Tuesday 10th September 2019,” the prospectus reads in part.
As per the usual in the mobile phone traded government bond, investors require a minimum of Ksh3,000 to begin uptake, as opposed to the usual Ksh50,000 minimum in other government bonds. The bond which is exempt from interest income tax, attracts a per annum interest of 10%. Interest payments are paid out every six months and in the case of M-Akiba Reopen 3 will be on March 9, 2020 and September 7, 2020.
Telcos Safaricom and Airtel will be the mobile phone operators conducting transactions for persons considering investing in M-Akiba. The prospectus goes ahead to say that eligibility for investing in M-Akiba is open to “individual persons registered for mobile money with participating mobile network operators (MNOs), with a valid Kenyan ID.”
M-Akiba, first launched in 2017, is a retail infrastructure bond, traded exclusively on mobile phones, that seeks to finance government development expenditure for state projects as well as provide budgetary support. “Money raised from issuance of M-Akiba shall be dedicated to infrastructural development projects, both new and on-going,” a statement on the M-Akiba website reads.
So far, M-Akiba has managed to raise a total of Ksh782 million from investors, with over 505,000 Kenyans taking up the mobile phone retail bond.
During its latest secondary listing at the NSE, the bourse chief ExecutiveGeoffrey Odundo had said, “I think the growth of M-Akiba is bright. In future, more and more Kenyans will take it up.”
With four offerings, M-Akiba had yet hit the target of Ksh250 million in individual offerings, although an initial Special Limited Offer (SLO) of Kshs150 million in 2017 was gobbled up by over 100,000 investors who ensured the tranche successfully achieved its target two days before the set deadline.
A spate of dismal returns in the past has also accompanied a failed press conference in March 2019 when journalists who had assembled to learn of the investor uptake ended up being sent away as the numbers had yet to be reconciled.
At the same time, Laikipia Deputy Governor John Mwaniki who oversaw the ringing of the bell during the latest M-Akiba secondary listing at the NSE, challenged the bourse to expand the bond’s reach to outside the Nairobi radius.
“We need more counties. Out there, the conversation is very difficult because people do not understand,” said Mwaniki.
This had come despite NSE CEO Odundo having said, “It’s desirous that M-Akiba is no longer a Nairobi product, but a product for the nation. … the capital markets is not a capital markets for Nairobi, it is for Kenya and we want to see a lot of counties using capital financing.”
Mwaniki, the Chair of Deputy Governors in Kenya, had however lauded the M-Akiba initiative for its innovativeness in financial inclusion, especially among the youth, in Kenya. “There are many Kenyans who are into betting, and I’m glad the NSE is showing them another way of doing things. … We must change the narrative from spending to saving.”
