Digital Assets in Capital Markets

Advanced course on digital assets - assets created using a blockchain/DLT network - designed for finance professionals.

8 CACS CPD Hours

15 November 2022 (Tuesday) | 9am-5pm

Kenya is due to launch an unprecedented sovereign bond to be sold exclusively through mobile platforms today, June 30th. The bond is termed ‘M-Akiba’, where ‘Akiba’ means savings in Kiswahli.

Targeted at small investors, the bond can be bought via at denominations as small as 3,000 shillings, which equates to US$29. The payment process is fairly simple. Investors do not need a bank account, and can easily register on their phones to participate.

Coupon payments are distributed as mobile money and the government intends to offer an attractive 10% yield on the bond, which is about 3% higher than rates at banks.

A huge implication this new mechanism poses is that the platform essentially cuts out intermediaries, which benefits both the issuer, as well as the bondholders. The smaller denomination size also benefits larger segments of investors, who may not be predisposed to setting aside large sums of money. If proven successful, this platform can in future be used similarly for trading shares, corporate bonds, as well as derivatives.

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