Mobile phone-based government bond, M-Akiba, yesterday crossed the 50 per cent subscription rate, raising optimism that it will hit the target ahead of time.
As of 2.30 pm yesterday, at least 61,000 Kenyans had registered on the platform, and bought Sh75.2 million worth of the bond through M-Pesa and Airtel Money.
This represents a 50.1 per cent subscription rate for the initial bond offer of Sh150 million that opened last Thursday and closes on April 10.
Official data, however, reveals that less than 10,000 investors registered on the platform have bought the government security, suggesting big time buyers are driving the numbers.
The Treasury is keen to ride on M-Akiba as a new channel for raising public cash as it races to keep pace with the huge infrastructure financing obligations.
The Treasury plans to sell a much bigger bond worth Sh4.85 billion on the platform in June. Investors can purchase a minimum Sh3,000 worth of the government security on M-Akiba up to a maximum of Sh140,000 a day.
The government is, however, considering raising the daily cap on mobile money transactions to enable investors buy bigger chunks.
“We’re still waiting for the central bank to give some guidance on this. I think they’ve taken a rightfully cautious position,” said Bob Collymore, the Safaricom CEO, adding that M-Pesa had up till yesterday accounted for Sh42 million of M-Akiba investments.
The Treasury is banking on M-Akiba to expand its revenue sources from the traditional pool of banks and high net-worth individuals to include retail investors.
Most ordinary Kenyans were put off by the previous minimum investment of Sh50,000 for Treasury bonds, Sh100,000 for bills and the need for a bank account.
Besides, they needed to visit Central Bank of Kenya for account opening and application for bids.
The Treasury is also hopping that the 10 per cent tax-free interest rate, higher than what is offered by the banks at seven per cent, will draw more Kenyans to invest in the virtual bonds.