The encyclopedia · Finance & Accounting · Financial decision · 2017–2018
Kenya sold treasury bonds over M-Pesa, minimum $30.
M-Akiba cut the government-bond minimum from KSh 50,000 to KSh 3,000 and put purchase on mobile phones; 85% of buyers were first-time bond investors.
National Treasury of Kenya · Central Bank of Kenya · Safaricom
The solution
Before M-Akiba, Kenya's government bonds were wholesale products: a KSh 50,000 minimum, a cumbersome account-opening process, and only about 10,000 retail investors holding 2% of outstanding bonds.
A KSh 150 million pilot sold out in days after launch on 23 March 2017, and the main KSh 1 billion offering followed on 30 June 2017: a three-year, 10% tax-free bond in units as small as KSh 3,000 (about US$30), bought through M-Pesa and Airtel Money with no bank account required.
Over 300,000 people registered at the main launch; 5,988 bought, raising KSh 247.75 million of the KSh 1 billion offered. Uptake fell short of hopes, but 85% of buyers had never owned a bond, investors spanned nearly all 47 counties, and it remained the first mobile treasury instrument in Africa.
Why it worked
- Mobile rails reach savers no broker desk ever could.
- A 100-fold cut in minimum turns a bond into a household product.
- The registration base (300,000+) proved demand for the channel.
What can be applied
When a product's barrier is the channel, not the price, deliver it through the channel the customer already uses daily — even for something as staid as a government bond.
Aftermath
A post-issuance study found the design sound but the launch flawed — timing, education and reminders — and Kenya and other markets began applying the lessons to distribute government securities by mobile.
Sources
- The story of M-Akiba: Selling Kenyan treasury bonds via mobile
- Kenya sells additional 1 bln shillings worth of bonds via mobile phone
- The story of Kenya's M-Akiba: selling treasury bonds via mobile
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