Kenya launched the world’s first ever mobile-only financial bond last month, a move tipped to further bolster financial inclusion in East Africa’s largest economy.
The “M-Akiba”, as the bond is called, can be bought using a cell phone, with as little as 3,000 shillings, which is equivalent to $30.
It is targeted at low-income households unable to meet the minimum investment requirement of 50,000 shillings or $500 for normal bonds, even as it aims to serve a growing number of mobile-money users.
While Kenya continues to make strides in mobile money services to boost financial inclusion, Nigeria is lagging, primarily due to a reluctance to adopt a Telecommunication-driven mobile money service.
Following the success of the M-Pesa, a mobile-phone based money transfer service owned by local Telco, Safaricom, more Kenyans have been brought into the financial fold.
At least 25 million Kenyans use the service through which they transacted $28 billion in 2015, 44 percent of Kenya’s GDP of $63 billion that year, according to data compiled by BusinessDay.
Financial inclusion in Kenya is under 50 percent like in Nigeria, but it’s the growth rate of the former that packs a punch.
While Nigeria has managed to grow financial inclusion to 44 percent from 39 percent in 2010, Kenya’s financially included have almost doubled to 41 percent from 22 percent in less than six years, according to BusinessDay data, thanks to mobile money.
The slow pace of Nigeria’s mobile money market has been attributed to the reluctance of regulators to license telcos as players in the market, while Kenya benefits from the M-Pesa.
Nigeria’s Central bank governor, Godwin Emefiele, who targets 80 percent inclusion in 2020, said in January that a plan to break the monopoly of commercial banks’ in the mobile-money market was on the table.
Africa’s largest economy recently launched a retail bond to plug its budget deficit and lure more Nigerians into the financial fold.
The two-year bond which offered a 13 percent coupon, requires a minimum of N5,000 and attracted subscriptions from over 2,500 people, according to the Debt Management Office (DMO).
A mobile version is likely to fare just as good or even better, given the level of internet penetration in Nigeria, coupled with its fast growing number mobile users.
The growth in internet usage more than tripled between 2012 and 2015, settling at 93.75 million users in 2016, according to state statistics body, the National Bureau of Statistics, and is widely tipped to break the 100 million mark in 2018.
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