Kenya reaffirmed its status as Africa’s Silicon Valley by launching the sale of the world’s first mobile-phone-based government bond as part of an ambitious plan to broaden the pool of investors in government securities.
Finance Minister, Henry Rotich said the government is initially making a limited offer of 150 million shillings to test the system before a bigger offer in June.
“M-Akiba is about financial inclusion, we want to get as many Kenyans to be included in the financial sector so using the mobile whereby about 23 million Kenyans are now having mobiles, they can easily access this product and they will be fully participating in the financial system,” he said.
Central Bank Governor, Patrick Njoroge said the bond, called M-Akiba, allows people to invest as little as 3,000 Kenyan shillings ($29.20).
“The first time, we will provide securities, government securities to the entire population – a point where you can buy a security for as little as 3,000 dollars… 3,000 shillings. It is remarkable, I don’t think this is something that we can take lightly,” he added.
Kenya pioneered the use of mobile money in 2007 with M-Pesa, a money transfer service, by telecoms operator Safaricom.
M-Pesa allows users to transfer cash and make payments on even the most basic mobile phone, in partnership with local banks.
Safaricom has since expanded the service to offer savings, lending, and insurance products.
With Nigeria’s over 180 million population and the highest mobile phone subscribers in Africa, technology should be used to tap a pool of small investors, especially now that the government is poised to diversify the economy.
Today, there are at least five GSM service providers with over 100 million active subscribers. The complementary growth GSM has offered Nigeria’s potential for ICT advancement is significant, with over 60 million subscribers using internet mobile data provided by telcos.
Although GSM has revolutionized the ease with which business is done in Nigeria, there are still huge untapped potentials. Kenya has just revealed one.