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Popularizing government bonds by selling them through mobile phones
This idea builds on the country’s famed success with financial inclusion of the unbanked through mobile money services. The government expects to raise around US$50 million by selling bonds via mobile devices.
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The government expects to raise around US$50 million by selling bonds via mobile devices. (Shutterstock/File)
K
enya recently announced a plan to sell government bonds to citizens through mobile transactions, using one of several service platforms in the country.
The government of Kenya, burdened with a rising borrowing deficit that is close to 10 percent of the Gross Domestic Product (GDP), is looking for new ways to crowdsource public finance.
This idea builds on the country’s famed success with financial inclusion of the unbanked through mobile money services. The government expects to raise around US$50 million by selling bonds via mobile devices.
Importantly, the average investment in a bond over mobile phones will be pitched at below $100, whereas current participation through stockbrokers and financial institutions requires five times this amount.
There may be merit in exploring such initiatives across countries in Southeast Asia, since they might improve innovation, financial inclusion and government-to-citizen participation, as well as public finance, as described below:
• Encouraging bond trading on mobile phones would bring millions of people into the financial market and encourage a new form of low-risk saving.
• Creating such platforms for bond-trading is likely to spur innovation in fintech and financial inclusion services by bringing together banks and non-bank financial institutions, NGOs, software companies, app developers, and mobile service providers.
