Low-income earners in the country will soon start to invest in treasury bonds with as little as Sh. 600. This is according to a plan by the National Treasury and the Central Bank of Kenya that will allow minimum investments of USD5 which is equivalent to around Sh. 650 based on the current exchange rates of about 130 per US dollar.
The move to lower the minimum investment threshold comes as the CBK aims to revamp the M-Akiba mobile platform that was designed to enable Kenyans to invest in bonds via their mobile phones.
“In line with the government’s focus on ‘hustlers’ and ensuring no one is left behind, the CBK intends to leverage the DhowCSD to introduce a retail bond for low-income investors, known as M-Akiba,” said Kamau Thugge who is the Central Bank of Kenya Governor.
“We expect low-income investors to invest as low as $5 (650) in government securities through M-Akiba, thereby democratizing investing in government securities.”
The Central Bank is expecting to run the M-Akiba solution for low earners alongside the DhowCSD trading platform. The M-Akiba solution had an original minimum threshold of Sh. 3,000.
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The DhowCSD is a trading platform that was designed as an upgrade on the Central Securities Depository (CSD) infrastructure to create efficiency in investing in government securities. It went live on July 31, 2023.
The platform has manual processes in the opening of trading accounts with the time taken to set up an account dropping from 14 days to just minutes.
“DhowCSD is transforming Kenya’s financial markets through enhanced operational efficiency and expansion of digital access, market deepening for broader financial inclusion, and improved monetary policy operations,” the CBK stated.
Currently, the CBK’s requirements stipulate that an investor looking to invest in treasury bonds must have a minimum of Sh. 50,000. An investor looking at treasury bills on the other hand must have a minimum of Sh. 100,000.
