by Ronald Njoroge
NAIROBI, March 23 (Xinhua) -- Kenya on Thursday launched the first mobile-based government bond that allows citizens to buy government securities from their mobile phones.
Cabinet Secretary in the National Treasury Henry Rotich told a media briefing that citizens would be able to purchase the M-Akiba bond for as little as 30 U.S. dollars.
The bond will debut at the capital markets as a special limited offer and will run for three weeks with a target of raising 1.5 million dollars for the government, Rotich said.
The East African nation will launch an additional 48.5 million U.S. dollars M-Akiba bond in June.
"Through the M-Akiba bond, Kenya has redefined how to increase financial inclusion among the unbanked populace by increasing the level of democratization at the bond market," Rotich said.
"The bond is aimed at catalyzing retail participation in Kenya's capital markets for its 23 million mobile money users," he added.
M-Akiba is a three-year tax-free financial instrument that will attract a 10-percent interest payment. Rotich said that the proceeds of the bond will be used to build infrastructure projects in the country.
He noted that the bond was attractive as it is a risk-free investment that is backed by the government.
The Treasury has said that the financial instrument will help promote a savings culture in Kenya.
"Kenya's savings rate currently stands at approximately 12 percent while the average for the developed world is 25 percent," Rotich said.
Central Bank of Kenya Governor Patrick Njoroge noted that the launch of M-Akiba was in line with Kenya's strategy to increase financial inclusion to ensure a smooth transition of monetary policy decisions throughout the economy.
"It will also cement our position as a world leader in mobile technology-enabled innovation, further attracting technology-based international investors to our shores," he added.
