The Central Bank of Kenya says its planned retail bond system will plug into the Dhow Central Depository System, easing fears of a parallel infrastructure that could have fragmented Kenya’s KSh 2 trillion bond market.
- •CBK Governor Kamau Thugge clarified that the Bank will not procure a new standalone retail bond platform.
- • retail system will run on the existing Dhow CDS framework already used for institutional investors, aligning retail participation with the current government securities infrastructure.
- •The clarification comes weeks after CBK invited bids for a retail bond system covering both primary and secondary transactions, sparking speculation that the Bank might bypass the Nairobi Securities Exchange, where annual bond turnover has now surpassed KSh 2 trillion for the first time.
Market Context and Industry Reaction
The tender, published on July 24 under reference CBK/007/2025–2026, sought a comprehensive retail bond information system capable of handling issuance, sale, settlement, and investor servicing.
The accompanying addendum later clarified that the system could be deployed either on-premise or in the cloud, and that bidders must prove scalability to handle large transaction volumes and integration with existing platforms.
The CBK said the retail system will enhance financial inclusion by enabling investors to buy smaller bond units electronically through the Dhow CDS, mirroring the structure already in use for institutional trades.
The platform’s interoperability is expected to simplify access and record-keeping for retail investors while preserving the NSE’s role as the country’s secondary bond market.
Market participants had voiced concern that a new CBK-run platform might duplicate or undermine the NSE’s trading infrastructure. By confirming that retail transactions will operate through Dhow CDS, CBK appears to have addressed those fears and reinforced institutional alignment across Kenya’s bond market ecosystem.
