The M-Akiba bond is traded via mobile phone.
Treasury has given Integrated Payment Services Ltd, the owners of PesaLink, an ultimatum to deliver the target for the mobile-based M-Akiba bond by Saturday or be kicked out.
The Standard has learned that a crisis meeting was called Thursday after the Government realised they could not meet the set targets.
As of Wednesday, the bond issue had attracted only Sh53.9 million in bids, a far cry from the Sh4.8 billion anticipated by the Government. M-Akiba, whose sale will expire in a week’s time, issued a Sh1 billion offer with a Sh3.8 billion green shoe, a provision that allows underwriters to sell investors more shares than originally planned by the issuer.
“The reason why PesaLink was brought in was because they promised to push sales up, but that is not happening,” a source told the Standard.
The entry of PesaLink was set to be a game changer by increasing the amount a single investor could bid from the Sh140,000 a day capped on telcos to almost Sh1 million per transaction, meaning investors could buy as much as they could afford.
However, only six banks out of 26 have signed up with the PesaLink window. These are Commercial Bank of Africa, Prime Bank, Guardian Bank, Jamii Bora, Credit Bank and Middle East Bank. Dormant players such as KCB and Equity Bank have snubbed the window. Treasury is said to be rethinking this strategy since the bond largely targeted ordinary citizens who do not need a bank account and could invest as little as Sh3,000 through their mobile phones.
Integrated Payment Services Ltd Chief Executive Jennifer Theuri however said 11 banks had enlisted on the platform, but declined to comment on the ultimatum.
“We are not at liberty to discuss our contractual obligations externally at this point. It is instructive to note that the PesaLink platform has been enjoying considerable growth and we now have 11 banks on board who have managed to test the systems and whose customers are now transacting,” said Ms Theuri in an emailed response.
Another source said Thursday’s meeting had given impetus to all stakeholders to sell the bond to avoid total failure after two weeks attracted only half a million buys.