M-Akiba, the world’s first mobile traded bond, has been launched after its successful pilot phase in March. Issued by the National Treasury, the bond has set out to raise Ksh1 billion, with a greenshoe option that allows the government to take up to Ksh3.85 billion.
The three-year tenure will see investors get a 10 per cent coupon per year, payable every six months. Mr Sam Kimani, the Chairman of the Nairobi Securities Exchange (NSE), says the bond comes at an opportune time when Kenyans have their sights set on innovative products.
The offer will run from 30th June to the 21st of July at a non-taxable interest rate of 10 percent for a tenure of three years.
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“Kenyans finally have an opportunity of engaging with the retail bond market, which has for a long time been dominated by foreigners. And we can confirm that they are interested in it seeing that target of the special limited offer bond was met just 8 days after it was launched,” Kimani said.
The bond was first introduced to Kenyans in March this year when Treasury offered a limited bond of Ksh150 million with the intent of raising money internally to fund infrastructure projects, which was oversubscribed by eight times.
National Treasury Cabinet Secretary Henry Rotich, while launching the bond, invited Kenyans to buy the bond as a means of saving. “As it is, Kenyans have a low saving culture. This bond is meant to turn this around, especially because there is the interest rates offered to entice them.”
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Investors of the tax exempted bond will only need an initial amount of Ksh3,000 and thereafter multiples of Ksh500. The maximum a person can invest has been raised from the Ksh140,000 requested in the special bond to Ksh999,999.
Unlike the previous issue, the Govt has decided to include KBA’s Pesalink to act as payment platform for those transacting more than 140,000, the maximum amount one can transact via M-Pesa and Airtel money. With KBA’s Pesalink, one can transact a maximum of Ksh1000,000.
“Apart from mobile money, Kenyans will also be paid through the newly launched Pesalink. Payments will be made every six months beginning January 22, 2018,” said the Cabinet Secretary.
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According to the organizers, there is special tariff for both M-Pesa and Airtel Money users with transaction fee being capped at Sh 100 and Sh 90 respectively. Liquidity provider is Commercial bank of Africa while Huduma Center has been tasked to act as a call centre.
Rotich also noted that going forward, a portion of all infrastructure bonds will be included in the M-Akiba bond. The NSE listed bond is open to Kenyan citizens registered on Airtel or Safaricom mobile network operators. Interested participants need only to dial *889# to subscribe. Redemption of the bond will be on July 20, 2020.
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