Launched in 2017, M-Akiba set the base for Kenyan government bonds to be sold through mobile phones involving a constellation of both public and private partners who each played different roles.
In the first issue, Treasury offered an Sh1 billion infrastructure bond with an over-allotment option of Sh4 billion but only managed to get Sh247 million from the market. The bond had been structured to attract small investors with investments of as little as Sh3,000 to help fund infrastructure as well as inculcate saving culture.
With hopes to attract more subscribers since its launch the government reopened sale of M-Akiba retail infrastructure bond worth Sh5 billion. Re-opened to the public in the February, the bond sale, a collaboration between the Nairobi Securities Exchange (NSE), Treasury and the Central Depository and Settlement Corporation (CDSC) — missed the set target despite a two-day trading extension to March 10.
In spite of attracting about 83,000 new participants to bring the total number of registered users on the platform to 459,586 translating to 79% subscription rate. The latest M-Akiba issue performed worse off than its former which raised a total of Ksh.247 million. The bond sale failed to raise a total of Ksh.197 million against a Ksh.250 million set target from the Ksh.1 billion original goal without setting a maximum ceiling on over-subscriptions.
M-Akiba has since its launch raised a total of Ksh.594 million while paying out a combined interest of Ksh.59.7 million as at March 2019. In 2017, the Treasury raised Sh247.75 million, being 24.76 per cent subscription, out of Sh1 billion that was put on sale. Only the pilot bond of Sh150 million was fully taken up a few people who opened the Central Depository and Settlement Corporation (CDSC).
Investors who bought the bond will receive interest payments in September 2019, March 2020 and September 2020 when the invested amount will also be redeemed. The next sales will be in May, July and August, each targeting Sh250 million as noted by the National Treasury.