More opportunities for mobile money


Kenya Government launched the world’s first sovereign bond sold exclusively through mobile platforms, highlighting key role now being played by mobile money and mobile phones.

Kenya has been very innovative especially on mobile money and the M-Akiba bond is the latest of such innovations aimed at raising funds for the Government. “Akiba” means savings in Kiswahili and M-Akiba is simply a shorthand for “mobile savings”. The M-Akiba bond is targeted at small investors both formal and informal as it does not require a bank account to participate in it. Investors can register on their phones in just a few minutes and invest as little as US$29. The bond is also attractive as the Kenyan Government offers a juicy 10% annual return on the three-year bond with coupon payments made through mobile money. The bonds can be also be traded on the secondary market using mobile money as well. This is a great innovation from Kenya and mobile money is playing an increasing role. Kenya, due to such innovations is ranked the third most innovative country in sub-Saharan Africa by the United Nations’ Global Innovation Index 2017 after South Africa and Mauritius. Mobile money in Kenya has transformed the economy and the financial services sector as it is increasingly being used for trading shares, corporate bonds and even derivatives. Mobile bond trading will definitely be a success in East Africa’s largest economy. Kenyans are already addicted to sports betting on their phones using mobile money and as such playing the financial markets would be no great leap.

Such innovations are needed here in Zimbabwe which is ranked lowly on innovation, only above Burundi, Niger, Zambia, Togo and Guinea in sub-Saharan Africa according to the United Nations’ Global Innovation Index 2017. Persistent cash crisis and growing informal sector also raises the need for the country to adopt such innovations. Zimbabwe has been battling a cash shortage since 2015 and every measure put in place by relevant authorities have failed to stem the crisis, which now requires new innovations.  Zimbabwe’s largest telecommunications services provider announced that contribution of mobile money services to its revenue has been increasing. Ecocash increased its level of transactions as mobile money platforms capitalised on the cash crisis whilst Ecosure increased its active subscriber base by over 100%. This highlights the new dynamics in the financial services landscape which was traditionally dominated by banks. Introduction of new services such Kenya’s M-Akiba or trading of shares, will not only increase revenue for mobile money services provides but will promote accessibility of financial products, save costs as it cuts out the middleman and promotes financial inclusion. This is a huge innovation which may change Zimbabwe’s financial services landscape. Given the shrinking formal economy and rising informal sector, adopting Kenya’s M-Akiba may help unlock revenue for the Government from the informal sector.

Kenya’s pilot offer of the savings bond in March 2017 lured over 100,000 people to register with 5,692 of them buying the bond. The low number of buyers was partly a result of a technical hitch at one of the mobile operators. Given Zimbabwe’s lower investment options especially for low income earners and the informal sector, such innovations may be well received. According to Financial Securities Exchange (Finsec), an alternative trading platform, “the Securities and Exchange Commission of Zimbabwe (SECZ) is planning to introduce mobile share trading by October this year. This will be a great development as it will open up the capital markets to broader participation. Lower investor participation on the local bourse has partly contributed to delisting decisions of some counters. Introduction of mobile share trading and adopting some of the innovations from Kenya will help mobilise resources and participation on Zimbabwe’s financial markets. Companies normally participate in financial markets such as the stock exchange to raise capital among other factors, which is a function of investor participation. Meikles, Colcom and Dawn Properties warned that there were contemplating their future on the bourse and may join the pool of companies that have exited the local bourse.

Adopting innovations from Kenya and implementation of supportive regulation will encourage growth and deepening of Zimbabwe’s financial markets.


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