A Look At How The Newly Launched M-AKIBA Bond Works

The recent launch of M-AKIBA Bond by the Kenyan government has put the country in the world map again, as it becomes the first country in the world to offer a mobile platform for lower income citizens to trade in government securities. A pilot with an initial offer of Ksh. 150 Million, with a bigger launch targeting Ksh. 4.85 Billion set for June.

For Eligibility:

  1. You must be a Kenyan citizen.
  2. Have a registered mobile line (Safaricom or Airtel)
  3. Deposit a minimum of Ksh. 3,000
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How it works;

  • M-AKIBA is the first of its kind retail bond where any Kenyan with Ksh. 3, 000, a handset and a mobile payment system can buy a treasury bond.
  • To use M-AKIBA, one dials *889# on their keypad and follow simple steps as directed to open a CDS account.
  • The inter-phase is designed to work on all phones i.e Smart phones and Kabambe/”Mulika mwizi”.
  • You cannot register twice i.e One CDS account, one registered mobile number.
  • Upon successful registration and going live, you will be required to deposit your phone with at least Ksh. 3, 000 to trade. Individuals are allowed to trade a maximum of Ksh. 140, 000 a day in line with CBK’s guidelines on Mobile Network Operators money transfer platforms.
  • The tax free M-AKIBA bond attracts a 10% coupon rate (interest rate) to be paid twice a year to MPESA or Airtel Money. This will be over a period of three years.
  • M-AKIBA is a straight bond; a bond that pays interest at regular intervals and at maturity pays back the principal amount invested.
  • M-AKIBA does not attract price variations. An individual will buy and sell anytime through market makers (Brokers, investment banks fund managers among others)
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The government plans to collect a total of Ksh. 5 Billion from the M-AKIBA Bond in efforts to diversify on dependence on foreign aid. The bond offers cheap money to finance large infrastructure projects envisioned in vision 2030.

 

 

 

 

 

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