by Bedah Mengo
NAIROBI, March 24 (Xinhua) -- Buying Treasury bonds has been a novel experience for Jackson Mulinge, a photo-copyist in a government agency in Nairobi, Kenya.
Every week, he saw adverts by the Central Bank of Kenya (CBK) in newspapers about auctions of the securities with a shrug as the money involved were unreachable for him.
The government regularly sells Treasury bonds worth at least 58 million U.S. dollars and bonds valued at as high as 291 million dollars.
Bidders are normally required to have at least 500 dollars minimum, with the figure having been reduced some years ago from 9,708 dollars.
But Thursday, Kenya's Treasury launched M-Akiba, a mobile phone-based government securities trading platform allowing low-income citizens like Mulinge to trade in the papers by investing from as low as 30 dollars to a maximum of 1,400 dollars.
Aimed to encourage a savings culture, the Treasury bond worth 1.5 million dollars was floated Thursday during the launch in a pilot sale that generated a lot of interest among ordinary Kenyans.
"This will not substitute high amounts being done by banks but will add up to the domestic borrowing," Treasury Cabinet Secretary Henry Rotich said.
"We have 23 million registered mobile money users, multiply by 3,000, it gives you 669 million dollars, a good indication of the money we can raise for infrastructure development, easing pressure on external borrowing," Rotich said.
Kenyans are buying the bond through their mobile money accounts namely M-Pesa (Safaricom) and Airtel Money (Airtel)
On Thursday, the bond started trading at about 11 a.m. and got bids valued at about 4,000 dollars in 15 minutes, according to the Central Bank.
Among those bidders was Gilbert Munyasia, a computer technician who is self-employed in Nairobi.
"I invested 60 dollars that I had received from a client as part of my payment the previous day. I had eagerly awaited for the opportunity since last year and I could not let it pass," said Munyasia, excited.
The only challenge he had with the platform, said Munyasia, was that there was a lot of delay in executing the transaction.
"I dialed *889# on my mobile phone as directed but had to repeat the process up to five time because the system was down. Then at one point I was told there was a technical error that I try another time," he recalled.
Those yearning to invest reported similar experiences for the major part of Thursday and Friday morning, with the problem being blamed on Kenyans jamming the system leading to outage.
The tax-free bond whose yields stand at 10 percent is expected to raise citizen's saving culture rate currently at between 10 and 12 percent of the gross domestic product to 30 percent.
"This product will dramatically change the saving culture as it increases products available for saving to the ordinary citizen. Its yield offers a 3 percent point advantage over banks, currently giving interest rates at 7 per cent following introduction of caps last year," Central Bank Governor Patrick Njoroge said.
The three-year tenor bond which will be sold until April 7 will be listed at the Nairobi Securities Exchange.