Kenya sells bond over mobile phones in world first

NAIROBI (Capital Markets in Africa) – Kenyans can now buy government bonds using only their mobile phones.

The nation’s Treasury on Thursday began selling 150 million shillings ($1.5 million) of three-year debt using a platform known as M-Akiba, the first such product across East Africa.

“For the first time we will provide government securities to the entire population,” Central Bank Governor Patrick Njoroge said at a briefing in the capital, Nairobi. “This will dramatically change the savings culture of our people by increasing the savings products.”

M-Akiba, derived from the Swahili word for savings, will run on platforms including Vodafone Plc unit Safaricom Ltd.’s M-Pesa, a global pioneer in mobile money. M-Pesa processed about 851 billion shillings ($8.2 billion) of transactions in the third quarter of last year, about 79 percent of Kenya’s total value of mobile-money transactions.

Investors will be required to buy a minimum 3,000 shillings of the securities, which have a 10 percent coupon, according to the Kenya Association of Stockbrokers and Investment Banks.

To buy the bonds, investors simply have to use their national identity numbers to register as investors on their phones, according to the M-Akiba website. After accepting the terms and conditions, they receive confirmation of their account details allowing them to proceed with their purchase.

KCB Group Ltd. is underwriting the initial offer, Treasury Secretary Henry Rotich said at the launch, adding that the government will target 23 million mobile-phone users to raise another 5 billion shillings in June. The product, initially mooted in 2015, was delayed to get the infrastructure right, he said.

Safaricom shares rose as much as 2.2 percent to 18.50 shillings on Thursday, the highest in six weeks.

“It is revolutionary, it enfranchises the Kenyan citizen,” Aly-Khan Satchu, chief executive officer of Nairobi-based Rich, an adviser to companies and wealthy individuals, said by phone on Thursday. “The mantra of the global economy is financial inclusion and M-Akiba is a good example of financial inclusion and we need to see more of these kinds of things.”