Kenya's Treasury has cautiously returned to small and individual
investors to raise Ksh4.85 billion ($48.5 million) through the M-Akiba
bond.
Last week, Cabinet Secretary Henry Rotich set a
lower target of Ksh1 billion ($10 million) for the bond, and allowed the
public to take up an additional Ksh3.85 billion ($38.5 million) in the
event of increased demand.
The minimum investment in a
normal Treasury bond is Ksh50,000 ($500) and in a Treasury bill
Ksh100,000 ($1,000), which locks out the majority of retail investors.
This is despite a successful pilot programme that saw the government collect the full amount of Ksh150 million ($1.5 million) it required in April this year.
The offer opened on June 30 and closes on July 21, according to the bond’s prospectus.
The
government is targeting individual investors with cash as low as
Ksh3,000 ($30) to invest in the M-Akiba bond as part of measures to
promote financial inclusion and shore up the country’s national savings,
currently estimated at 12 per cent of the GDP.
The bond is exclusively traded in partnership with telcos such as Safaricom and Airtel through mobile phones.
Commercial banks will use their payment platform PesaLink to facilitate payment for M-Akiba bond transactions.
Mr
Rotich said plans are underway to review the current mobile money limit
of Ksh140,000 ($1,400) per day to allow investors to transact larger
amounts through M-Akiba.
Proceeds from the bond will be
used to finance government infrastructure projects. The bond’s duration
is three years, and investors will earn an interest of 10 per cent per
year.
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