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Kenya sells bonds via smartphone and without bank account

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Tinuku ~ Kenya sells millions of US dollar bonds via smartphone without the need for a bank account. The Kenyan government began selling bonds value 1 billion shillings via mobile apps and initial sales of 150 million shillings sold out in a matter of days. The African nation began selling three-year infrastructure bonds called M-Akiba on March 23, 2017.

Tinuku Kenya sells bonds via smartphone and without bank account

Kenya became the world's first country to issue bonds via smartphone without the need for bank accounts. The initial acquisition fund of 150 million shillings is the first phase of bond issuance. The offer on Friday still leaves 3.85 billion shillings to be sold at a later stage.

"Today we are again celebrating our leadership in mobile money-based innovation," Kenyan Finance Minister Henry Rotich said at the launch of bond at the Nairobi Securities Exchange on Friday.

The sale of these bonds is the advancement of technology-based financial services innovation in Kenya. Earlier in 2007 ago, Kenya shocked the world for being a pioneer of mobile money products called M-Pesa.

Kenya needs a lot of money to run an ambitious development program. These programs include the construction of new roads and railways.

M-Akiba allows individual investors to place funds of at least 3,000 shillings and a maximum of 1 million shillings. The facility for the buyer is a tax-free interest earned 10 percent each month and these bonds can be sold in the secondary market.

Initially, these bonds are available on the funds transfer service provided by telecommunication companies. However, then these bonds are also available on Pesalink is a similar service provided by commercial banks from 30 June to 21 July 2017.

The bonds will be traded on the stock exchange on July 25, 2017. Rotich said, in the future all infrastructure bonds offered by the government will have a share of sales through smarthphone.

The successful method of selling these bonds will destabilize traditional financial services by providing an alternative to small investors with low incomes in banks, online money wallets, and savings cooperatives to take on roles.

In addition, the platform will give the Kenyan government a new source of cheap money from citizens to be used to finance other major infrastructure projects. Currently, only 2 percent of government bonds in Kenya are bought and sold by individual investors.

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