The share of the government’s domestic debt stock held by retail investors has nearly doubled to 12.42 percent from 6.96 percent in March last year, reducing that by banks, insurance companies, and pension funds.

Data by the Central Bank of Kenya (CBK) shows that individual investors have now overtaken insurance companies in the share of the government’s domestic debt held, making them the third largest buyers of government papers after banks and pension funds.

In March last year, retail investors held only Sh316 billion of the total Sh4.5 trillion domestic debt stock, but this has now more than doubled to Sh650 billion, which is 12.42 percent of the total Sh5.2 billion local state borrowing currently.

This has seen the share held by institutional investors, including banks, insurance companies, and pension funds, who have either held almost the same amount or slightly decreased it since last year, slide.

Pension funds have recorded the highest slide in the period, with their combined portfolio in government bills and bonds dropping by 4.38 percent from 33.69 percent in March 2023 to 29.31 percent this year, having maintained their portfolio in securities at Sh1.5 trillion.

Banks’ share has also dropped slightly over the last year, from 45.95 percent to 45.89 percent this year, meaning they have slightly increased their loans to the state from Sh2.3 trillion to Sh2.4 trillion.

Insurance funds, which previously held 7.36 percent of government securities and now hold 7.11 percent, increased slightly from Sh334 billion last year to Sh371 billion currently.

The share held by parastatals also declined from 6.04 percent last year to 5.26 percent currently, translating to an increase of only Sh1 billion in their investment in securities from last year’s Sh274 billion to Sh275 billion.

Over the period, the returns on government securities surged significantly, jumping from 10.75 percent for the one-year paper to over 15.8 percent currently, enticing more retail investors. The rise could have also been influenced by the launch of the CBK’s digital investor portal, DhowCSD, which went live in July last year, allowing more retail investors to buy or sell government securities from anywhere in the world without the need for intermediaries.