Kenya has Thursday unveiled the Africa’s first mobile-only government bond, a service that will allow citizens to buy government bonds on their cell phones and mobile financial services.
A government bond is a bond issued by a national government, generally with a promise to pay periodic interest payments and to repay the face value on the maturity date. Government bonds are usually denominated in the country’s own currency.
Dubbed M-Akiba bond, a Kiswahili word to mean savings, the bond was first announced in 2015 as a way to give ordinary Kenyans access to the country’s capital markets as well as encourage a saving culture among the citizenry.
Through the service, investors can buy in increments as small as KES 3,000 (about $30) using their mobile phones, compared to the minimum of 50,000 shillings individuals had to spend previously to buy government bonds.
The bond will be offered on M-Pesa, as well as other mobile money networks. Investors can buy and sell the bonds on the Nairobi Securities Exchange via their phones.
Coupon payments will be paid directly to their phones. Like M-Pesa, both smart phones and basic features phones can be used.