On Friday the Treasury Cabinet Secretary launched the second tranche of M-Akiba, the government bonds that can be bought and traded via mobile phone.
The first tranche of M-Akiba, worth Kshs 150 million was launched in March 2017, and marked at 10%, maturing in April 2020. They had their highest trading day on May 12 when about Kshs 345,000 was traded; usually, about Kshs 100,000 per day ($1,000) of M-Akiba are traded by investors so far. At the time of launch, the indication was that another Kshs 4.85 billion was to be raised in June 2017.
The new M-Akiba infrastructure bond issue (MAB2/2017/3) is targeting Kshs 1 billion (~$9.7 million), with a green shoe option to raise another Kshs 3.85 billion. These are also three-year infrastructure bonds (dated 24 July), paying 10% per annum, with interest paid every six months, and the minimum investment is, again, Kshs 3,000 (~$29). Payments for the new bonds will be done on mobile money such as M-pesa (by dialing *889#) as well as through Pesalink – a new service from Kenya banks that allows their customers to make payments via phone and mobile money transfers of up to Kshs 1 million (~$9,700) per day – which is seven times greater than what they can do with mobile money, under current banking rules (set to prevent money-laundering). The deadline for investors to apply for the M-Akiba bond is July 21, and the trading commission for will be 0.1% of allocations.
EDIT (July 23 Nation): MAB2/2017/3 has been extended to 8th September and the bond will start trading on 12th September. It has been reported that investors bought Kshs 128 million before the initial deadline, and the newspaper notice of the extension mentions that these invests will be paid for interest earned between July 24 and 11th September.
EDIT February 22, 2019: A new tranche of M-Akiba bonds will be on sale from February 25 to March 8, 2019, with the Treasury targeting to raise Kshs 250 million by offering investors 10% interest. The bond targets investors who can put in as low as Sh3,000 via their mobile phones then lock it in for a period of three years. They then earn interest after every six months and principal amount upon reaching maturity date. Those wishing to exit early can do so through Nairobi Securities Exchange where the bond will trade on the secondary market.
‘Akiba’ means ‘savings’ in Swahili.
$1 = Ksh 103