Sh2.4m snapped up on day one of M-Akiba sale, as demand surge crashes system

Kenya’s first mobile traded bond went up for sale on Thursday with high demand from the public.

The M-Akiba bond which targets small investors has proved a hit with Kenyans seeking to access government securities.

By 4pm, a total of Sh2.4 million had been collected from 1,720 investors.

Such was the demand that system temporarily crashed as stakeholders moved to tweak the system to handle the demand.

“There has been an overwhelming demand for M-Akiba bond, the traffic for registration and purchase was beyond what had been expected. Due to the overwhelming response, any delays in subscription is currently being rectified to accommodate the high number of investors,” M-Akiba said on its official twitter handle.

The government is trialing the bond, offering Sh150 million in the initial phase to test investor appetite.

Investors can snap up the bond for as little as Sh3,000 in what the treasury expects will change Kenya’s savings culture.

“At the moment we are relying on savings from outside because Kenyans are not saving so we have given you a product hoping you will start saving from now which is very good for the economy,” Treasury Cabinet Secretary Henry Rotich said during the launch of the bond.

Investors can buy up to Sh140,000 of the bond per day, as that is the transaction limit set for mobile money transfer services.

Central Bank of Kenya Governor Dr Patrick Njoroge hailed the launch of the M-Akiba bond, adding that it heralded a new wave of debt mobilization that leverages on technology.

“It has required a lot of collaboration of many teams working long and hard and in a sense this is why this product has taken so long to be launched. Frankly, if this is not transformational, I don’t know what is,” Dr Njoroge said.

 The tax free M-Akiba bond attracts a 10 percent interest paid to investors over its three year tenor.

The government plans to collect a total of Sh5 billion from the M-Akiba bond.

Mr Rotich said the bond would be on offer until April 10 or until the Sh150 million is raised.

Based on the success of the pilot, Treasury is expected to raise the remaining Sh4.85 billion in June.

Report by Mumbi Warui and Sophie Kinoti