How to invest in Treasury bills and bonds through CBK’s DhowCSD app and pay via M-Pesa

The Central Bank of Kenya (CBK) has activated a mobile payment feature on its DhowCSD platform that allows investors to pay for successful bids for government securities using M-Pesa.

Under the latest CBK update, investors can initiate payment through the DhowCSD mobile application available on both App store and Google Play store or online portal.

Payments of up to KSh250,000 can be completed through M-Pesa under the “Transactions” section of the mobile application.

According to CBK, the M-Pesa option is currently the only mobile payment platform available under the new feature, with CBK indicating that other platforms will follow.

DhowCSD is CBK's digital platform for investors to access and manage government securities.

The platform allows investors to participate in the government securities market remotely, including placing bids for Treasury bills and Treasury bonds, accessing auction information and managing their investment portfolios.

Investors can access DhowCSD through the mobile application or the online portal. An individual seeking to use the platform must first create an investment account.

The registration process requires an active email address, a mobile phone or computer and an active mobile number registered with a Kenyan mobile network operator.

Applicants are also required to provide their KRA PIN, settlement bank details and identification documents.

The identification documents listed by CBK include a National Identity Card, passport or alien card, together with a clear passport-size photograph.

A tax exemption certificate can also be provided where applicable.

CBK requires an incomplete registration process to be completed within seven days, after which an incomplete profile is automatically deleted.

Once the account has been created, the investor receives an email containing their assigned username. The username or email address can subsequently be used to log in.

After the account has been approved, investors can log into DhowCSD through the application or online portal and view available government securities.

The platform allows users to place bids using the BUY/SELL option.

Investors can participate in auctions through competitive or non-competitive bids, depending on the available security and the investor's chosen bidding method.

The platform also provides access to different categories of government bonds, including fixed-coupon bonds, infrastructure bonds and savings development bonds.

Treasury bills are also available through the government securities auction process.

Once an investor's bid is successful, the investor needs to complete the payment for the securities awarded.

CBK's update allows eligible payments to be initiated directly through the DhowCSD application system.

The investor logs into the application or portal, goes to the “Transactions” tab and initiates the payment.

The payment can then be completed through M-Pesa, provided the amount falls within the set limit of Sh250,000.

CBK has stated that other mobile payment platforms will follow, but the latest update does not specify when those options will become available.

Beyond placing bids and making payments, investors can use DhowCSD to:

• Participate in Treasury bill and Treasury bond auctions;

• View auction results;

• Check payment instructions;

• Monitor upcoming corporate actions;

• Access portfolio statements;

• Place secondary-market instructions; and

• Place pledge instructions.

The platform therefore serves as a digital interface through which retail investors can manage different aspects of their government securities investments.

DhowCSD provides access to several types of Treasury bonds.

Fixed-coupon bonds carry a fixed interest rate over the life of the bond and provide interest payments at the intervals specified for the particular security.

Infrastructure bonds are fixed-coupon government bonds issued to finance designated infrastructure projects. The material provided notes that these bonds can have tax-exempt returns.

On the other hand, Savings Development Bonds are long-term fixed-coupon securities designed to encourage savings.

The specific securities available to investors, however, depend on the securities being offered by CBK at the time.