M-Akiba initiative by the National Treasury in Kenya provides an avenue for direct-investment in Treasury bonds conveniently through mobile phones by investors. M-Akiba leverages on mobile technology to provide creative, cost efficient and convenient fundraising for ongoing infrastructure projects while still creating economic value for investors and the government.
Mobile money has continued to revolutionize the financial services landscape in Kenya with over 26.8 million mobile subscriptions transacting a total of Kshs 2,816 billion in 2015. These figures indicate a firm mobile money platform which is accessible to millions of Kenyans, an enabling environment for M-Akiba.
M-Akiba initiative is a great step towards democratization of investment in treasury bonds as it allows for structuring and placement of securities at a much lower cost hence re-capturing the value of the bonds that gets lost in the abyss of the financial system by getting rid of middlemen i.e. brokers. Much of the money in the government debt market gets eaten in broker-dealer channels before reaching the investors. M-Akiba will provide the Government with its own disbursement platform to connect directly with investors instead of paying the middlemen. This means better returns and lower transaction costs for investors and the government.
M-Akiba further utilizes technology to simplify storage and management of data related to the treasury bonds. In addition, this technology helps standardize the process and improve the workflow from origination to maturity. The use of this mobile technology is not without its challenges which include:
- Increased risk of cyber attacks due to the obvious lucrative nature of M-Akiba.
- Lack of proper Data Protection regulatory framework in-place and systems to allow the regulators to implement the regulations and monitor compliance with privacy laws by operators.
- Laxity in use of mobile security solutions like Mobile Connect, facilitated by GSMA which provides for universal identity solution to protect unauthorized persons from accessing consumer’s information.
Proper Data Protection regulatory framework backed with effective mobile security solutions will greatly reduce the risks associated with the use of mobile technology such as loss of investment by consumers. A secure system will allow for growth of M-Akiba both locally and globally.
wbilaw 