A decade on, M-Pesa has morphed into mobile-based branchless banking and spread itself beyond Kenya. Variations of the scheme have been rolled out across Africa and parts of Asia and Europe.
So, reasoned Kenyans, if SMS-commerce could transform banking in Africa, why not do the same with government bonds, as traditionally it has been a big challenge to get people to save, not to mention governments to balance the national accounts?
Enter M-Akiba. M for mobile, Akiba for savings – the world’s first government bond to be sold solely via a mobile phone platform.
It seems a neat idea, designed to get Kenyans to save and invest, while opening up a domestic pool of funds. Only around 12% of Kenyans regularly save, whereas mobile coverage is among the highest in Africa, used by around 75% of the population.
Finance minister Henry Rotich had planned to launch the KSh5 billion ($48 million) pilot M-Akiba bond by last October.
Six months on, Kenya is still waiting for its mobile bond. Rotich pulled the October launch, citing market conditions and runaway rates, but there might be another factor at play – public distrust of officials in government.
A Kenyan running one of Nairobi’s myriad Sim-card outlets, tells Euromoney it’s one thing to transfer M-Pesa cash amongst Kenyans, but quite another to fund officials who could have their hands in the national accounts.
Still, central bank governor Patrick Njoroge is a fan of what is officially known as the Treasury Mobile Direct platform, devised with the backing of the World Bank. He describes it as an Uber-esque “democratisation of the financial system.”
“I think it will be transformational,” he enthuses. “We now need for people to bet long-term in our economy.
Still, as keen as he is for innovation, Njoroge says he is no product development manager for Kenyan banks. “Produce the products,” he says he tells bankers, “and we will review them, we will work with you. After all we have to sign off on it. The point here is we cannot wait, we cannot say do it at your own sweet time.”