@Mpenzi, While the legal framework may be a hindrance, the main challenge is how to make the bond attractive given that the source of revenue will end up being the government for all intents and purposes as the public university relies largely on government subsidies for its existence. My take is that this will be treated as infrastructure bond guaranteed by the government. However, the government is reluctant to guarantee due to HIPC considerations. I have approached other institutions to guarantee but there is no appetite. The investors would like to be assured of their investment and though a university bond is welcome, there are serious reservations harbored by investors.

Mmmhhh.

Interesting academic discussion.

First of all, I won't want to hear anything about CDS9they've caused more advanced economies to grind to a halt).
Securitisation is actually done better without credit ratings as they give you a false sense of security.
In Kenya the most obvious underlying instruments are loans and mortgages.

@ Emily
I like your thinking but... i also think that what you are describing is backing debt with debt.... and in the end a catastrophe is eminent.

See what I mean on "money as debt" by Paul Grignon http://www.moneyasdebt.net/

A good example is the collapse of the housing mkt in US recently and ensuing troubles. Just because Europe and the US are using it doesnt mean it is fault proof. Im not offering a tweak to your theory that would make it work, that would be presumptious, all im saying is maybe we can also learn from the mistakes made in the West.

my two cents

@ Emily - yeah pole, we seem to have deviated from your initial trail of thought. Pole, but Im happy to have bumped into like minded people :) Cheers!

@Scubidu - The local banks are known to put most of their attention towards gvt bonds as opposed to risky lending to common mwananchi but this trend i think has reduced over the last few years thanks to CBK. Previously you had to proove to the bank that you can afford to do wthout a loan to actually get one, and now there's a lady who stalks my collegues and I to take up a loan, even if i dont need one at the moment. of course when there is no money available to the common mwananchi, the economy will take a hit, so intervention by CBK is great, and welcome.

I saw your comments on fractional reserve banking. Yeah, the system creatss credit whenever someone takes up a new loan, but this is debt backed by debt, in my opinion there must be an elastic limit. We already knee deep in the mess, but i can't think of an alternative at the moment. The money creation process is flawed, and our taking on things that are practised in the west will be our undoing. So far our monetary system is quite conservative, but i think soon we'll scale up in the game.

What did you think of the documentary film - money as debt? More importantly, how do you think we can escape the trap, as individuals yaani?

Secondly have u seen this, and what are your thoughts on it? http://www.theeastafrica.../-/cghfxcz/-/index.html

Personally i think infrstructure bonds are great, coz the infrastructure will stimulate growth in existing sectors, along with job creation during developments, so in a way even though we're taking on a lot of debt, its self sustaining - at least i hope so.

Ur turn...

@ Scubidu - i've checked, i couldnt trace ur comments at Kenya Debt watch... Im new to Wazua site, hope u dont mind showing a girl around. Can u give a link to it? ama send to goldendelight@mail.com.
Thanks