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Kenya First Country To Issue Mobile Phone-Based Bond Without Bank, Sells Out In Days

Kenya First Country To Issue Mobile Phone-Based Bond Without Bank, Sells Out In Days

Kenya is the first country in the world to issue a mobile phone-based bond that does not require the availability of a bank account.

The Kenyan government began selling a three-year infrastructure bond, known as M-Akiba, on March 23, issuing an initial $1.44 million worth that was sold out in a matter of days.

The success of the bond issue via mobile has led to another $9.64 million being made available following the first part of the bond being fulfilled, according to TheNation.

The Kenyan treasury has borrowed a great deal in the past four years to fund an ambitious development program, with a great deal of the funds dedicated to transport infrastructure such as new roads and a coast-capital railway.

While few working or middle-class Kenyans bought government bonds due to minimum investment constraints and the need for a commercial bank account, M-Akiba has allowed for single investors to invest less without the need for an account. They will be able to trade them on the secondary market.

Kenyans are able to purchase the mobile phone-based retail bonds on mobile money through Airtel Money and M-Pesa, or via the inter-bank transfer platform PesaLink, according to TheStandard.

The PesaLink option was added for the second phase, raising the maximum daily amount that Kenyans can invest.

Kenya finance minister Henry Rotich expressed his pleasure at the success of the bond issuance via mobile during an event to launch the bond at the Nairobi Securities Exchange.

“Today we again celebrate our leadership in mobile money innovation,” said Rotich, according to CNBCAfrica.

Rotich revealed that all infrastructure bonds offered by the government in future will have a portion dedicated for sale via mobile phone.

The bond will be on sale from June 30 to July 21, and will be tradable on the stock exchange on July 25.

This second phase offering left another $37 million to be sold at a later date.