Kenya, long recognized as ‘ground zero’ in the development and evolution of mobile money (MM), has bolstered its reputation with a revolutionary offering: a Kenyan government bond that will only be traded on mobile phone platforms. The offering will be a five-year infrastructure bond, named M-Akiba, and the interest rate will be set by the National Treasury and Central Bank of Kenya. The bond will be available to 23 million Kenyans who only need a valid national ID and to dial *889# to involve themselves in the process. The offering, the first of its type in MM, has the potential to significantly increase the level of Kenyan participants on the Nairobi Securities Stock Exchange from only two percent.
At Enclude, we recognize that financial inclusion is not achieved with basic connection – whether that occurs through card or mobile channels. True financial inclusion extends to a wide range of financial products being made available to customer at an appropriate price. With this offering, the Treasury of Kenya is working to deepen the product suite available to customers, providing a new opportunity for tens of millions of Kenyans. The Treasury of Kenya also reduced the minimum amount required to access the bond from KES 50,000 ($466) to KES 3,000 ($28).
The Treasury of Kenya should be commended for its forward-looking and inclusive step. However, as is often the case with innovation, the product may be ahead of its time. In our work, we regularly see that financial literacy is one of the major reasons for limited uptake and usage of DFS. Acquiring a government bond, understanding the process, and your return on investment, will require another level of financial understanding from current mobile money users. We are eager to see the market’s response.