Kenya starts selling bonds via mobile phones

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Kenya’s government is initially seeking to raise $1.5m (£1.2m) from the mobile bonds

Kenya has become the first country to exclusively sell government bonds to citizens via their mobile phones, as it seeks new ways of raising money.

The country is already a pioneer in the use of mobile money.

The government is looking to tap into that network by allowing mobile phone users to trade the government securities across their phones.

Kenyans can buy one of the bonds for as little as 3,000 Kenyan shillings ($30; £23), the country’s central bank said.

Kenya’s banking system is fuelled by mobile payments.

The main provider of mobile transactions, M-Pesa – which is Swahili for money – has about 20 million users, and there are more than 100 times as many M-Pesa kiosks as there are cash machines in Kenya.


Finance Minister Henry Rotich said the government was initially making a limited offer of 150 million shillings to test the new bond before a bigger offer in June.

Kenya has borrowed heavily in the past four years to fund an ambitious construction programme, including roads and a new railway.

The bond, called M-Akiba, can be bought by phone users without any need for a bank account and pays an estimated interest of 10%.

Aly Khan Satchu, a financial analyst in Nairobi, told the BBC: “It’s giving access to every Kenyan citizen to government securities.

“The idea of collecting nickel and dimes and aggregating them will be a source of potentially cheap money for the government.

“But I think ultimately it’s a story about enfranchisement – allowing people with as little as $30 to invest in the capital markets. That’s a good thing.”

The country’s central bank governor, Patrick Njoroge, said the bond would “dramatically improve the savings culture of our people”.

Ronak Gadhia, an analyst at Exotix Partners, said he believed it was the first country to issue such bonds.

“And that is because no other country in the world has adopted mobile banking as much as Kenya has.”

Analysis: Nancy Kacungira, BBC News reporter, Nairobi

Kenya’s mobile-traded government bond has been in the works since 2015, and was finally launched today.

For as little as $30, Kenyan mobile users can now lend to the government and get paid a tax-free interest of 10% every six months.

Even though the minimum requirement is very low, government bonds have always been the preserve of the well-to-do, and a high level of awareness will be required for less investment-savvy individuals to take this up.

The success of this bond would shake up financial services by giving small investors alternatives to low interest earning accounts in banks, mobile money wallets, and savings co-operatives.

Apart from encouraging people to save, the platform will provide the Kenyan government with a new source of cheap money that it intends to use to finance large infrastructure projects.

Currently, only 2% of government bonds in Kenya are bought and sold by individual investors.

Kenya starts selling bonds via mobile phones