BY MARTIN MWITA
The Kenyan government is using Huduma centres to create awareness on M-Akiba as it seeks to hit a Ksh1 billion target in the mobile phone-based bond.
Under the Huduma Kenya initiative, the government is capitalizing on the 51 Huduma centres spread across the country to bring on board more investors.
Huduma centres act as one stop shop offering government services within one building.
The move to use the centres is seen as a strategy to mobilize more funds under the bond which is falling far from its target, 18 days to the closure of the current issue.
As at 10.00am on August 24(today), the platform had recorded at least 266,294 registrations with buys worth Ksh176.4 up from Ksh170.6 million last Friday, where total registrations stood at 264,888.
“We are working hard to get full subscription. There is a lot of engagement with stakeholders where we even have agents going to Huduma centres to show people how to do this,” NSE chief executive Geoffrey Odundo told Journalists in Nairobi.
Under the scheme spearheaded by the National Treasury in partnership with the NSE, investors can buy a minimum investment of Ksh3, 000 through Safaricom’s M-Pesa and Airtel Money.
The scheme offers a return of 10 per cent which is tax-free payable after six months.
“It is a very attractive offer. Ten per cent for three years- three thousand investment is great,” Odundo said.
Treasury has extended the bond’s sale to September 11 to accommodate more investors.
This is after an initial sale which ended on July 22 raised a paltry Ksh140 million, against a target of Ksh1 billion.
Treasury tested the market with a Ksh150 million pilot sale that was launched in March.
‘‘To ensure that all investors who bought the bond to the date of July 21, 2017 are not disadvantaged by this extension, any interest accruing to them over the extension period will be paid on a pro rata basis,’’ Treasury CS Henry Rotich said in a statement on July 21.
The bond, traded only on mobile phones, opens a new channel for investors with small amounts of money to lend to the government, as opposed to the traditional minimum entry point of Ksh50,000.
Treasury expects to use the mobile-based bond to mobilize funds for infrastructure development, easing pressure on external borrowing.
“This will not substitute high amounts being done by banks but will add up to the domestic borrowing,” Rotich said during the launch.
The government has been borrowing heavily both from the domestic and foreign markets to fund multi-billion infrastructure projects such as the Standard Gauge Railway, raising questions over the country’s debt sustainability.
Odundo said NSE remains optimistic the bond will hit its target.
“Kenyans are fond of rushing to buy in the last minutes as witnessed in the previous offer so we expect more buys towards the end,” Odundo said.