Kenya: M-Akiba bond surpasses target of 5,000 buyers
Purchases from investors ranged from Sh3,000 to Sh1.13 million, indicating that the sales were dominated by big buyersData released from Kenya's National Treasury showed that 5,692 investors bought the first mobile-phone based bond worth Sh150million, surpassing the target set of 5,000 buyers. Data indicated that out of the 102,632 people who registered on the M-Akiba bond platform, only 5.5 percent invested in the debut mobile phone based bond. According to a statement issued by the National Treasury, purchases from investors ranged from Sh3,000 to Sh1.13 million, indicating that the sales were dominated by big buyers, failing to reach the small mass market buyers it was intended to serve. As a result, this placed the average investment at Sh26,359. The Sh150 million raised marked the first tranche of the bond while the second tranche worth Sh4.85 billion will be sold in June 2017. Kenya's National Treasury is banking on M-Akiba to widen revenue sources from the traditional pool of banks and high net-worth individuals in an effort to plug the Sh500 billion budget deficit and retire old debts in coming financial year. The launch of M-Akiba was based on the assumption that the Sh50,000 minimum applicable in the government bonds market was above the reach of ordinary Kenyans. The 10 per cent tax-free interest rate, which is higher than the 7 percent rate offered by banks, was a further incentive to attract interest for the bonds.