The second issue of Government retail bond M-Akiba closed yesterday after netting a total of Sh247 million below the Sh1 billion target.
Announcing the results, the National Treasury in conjunction with the Central Depository and Settlement Corporation and the Nairobi Securities Exchange said the bond attracted a total of 303,534 investors in its main offer, out of which 5,988 bought the bond.
The low uptake has been blamed on inadequate awareness among Kenyans on what the offer actually entails.
In an earlier statement to the press, NSE chief executive officer Geoffrey Odundo expressed confidence of the bond hitting the Sh1 billion target before it closes.
However, according to sources from Treasury, emerging rifts between NSE and CDSC are largely to be blamed for the bondâs poor performance.
It is claimed that the NSE and CDSC, being the official marketer of the bond, wanted a three per cent commission of the total sum issued but the Treasury only offered 1.5 per cent. The fist issue of the bond, a special limited offer of Sh150 million, attracted 102,632 investors two days before the set deadline.
âWe are happy with the interest M- Akiba has attracted, and look forward to many other firsts. We are keen to utilize the M- Akiba platform to further sustain financial inclusivity.â said the chief executive of CDSC, Mrs. Rose Mambo.
The bond is a three-years infrastructural development issue with a coupon rate of 10 per cent annually, paid bi-annually until the bond matures.
Last month, the NSE announced that it had spent Sh4.8 million to launch the mobile-based bond.
âFundamentally, M-Akiba has opened an opportunity to stretch the sharing of interest income from Government borrowing to reach even the unbanked population,â the NSE said. âIndeed M- Akiba bond and mobile money in Kenya redefines the meaning of âfinancial inclusionâ and reduces significantly, the proportion of the âunbankedâ.â
The launch of the bond made Kenya the first country in the world to initiate a retail government bond traded exclusively through a mobile handset.
- Thank you for participating in discussions on The Star, Kenya website. You are welcome to comment and debate issues, however take note that:
- Comments that are abusive; defamatory; obscene; promote or incite violence, terrorism, illegal acts, hate speech, or hatred on the grounds of race, ethnicity, cultural identity, religious belief, disability, gender, identity or sexual orientation, or are otherwise objectionable in the Star’s reasonable discretion shall not be tolerated and will be deleted.
- Comments that contain unwarranted personal abuse will be deleted.
- Strong personal criticism is acceptable if justified by facts and arguments.
- Deviation from points of discussion may lead to deletion of comments.
- Failure to adhere to this policy and guidelines may lead to blocking of offending users. Our moderator’s decision to block offending users is final.