The government efforts to encourage individual Rwandans and local firms to invest on the stock exchange, especially in bonds, are beginning to pay off. The growing number of Umerenge SACCOs buying Treasury bonds is cited by experts as an example. About 30 Umerenge SACCOs bid for the Rwf15 billion five-year Treasury bond, representing 9.8 per cent of the total amount offered, a huge leap from eight applications November 2015 or 3.56 per cent in November 2015. 

Overall, 88 applied to the National Bank of Rwanda (BNR), which issued the bond on behalf of the government. The Umerenge SACCOs were part of the 60 retail investors that placed orders, which is also an increase from 47 orders during the November TB issuance, a statement from BNR indicates.

Banks accounted for 38.55 per cent of the orders, while institutional investors scooped the biggest portion of the government paper with 51.68 per cent of the applications, the statement shows.

It adds that the TB was oversubscribed by 226.1 per cent and will be listed on the Rwanda Stock Exchange today.

"This shows the confidence that investors have in the government of Rwanda in its capacity of debt reimbursement, transparent and coherent debt management policies,” the central bank said in the statement signed by John Rwangombwa, the bank governor.

The bond’s redemption date is February 19, 2021.

This will be the seventh bond to be issued under the quarterly issuance programme.

Like the previous one, the money realised will be used finance infrastructure projects, and support the development of the local capital market, the central bank statement indicated. The next issuance for this financial year is May 25, the statement added.

The government issued a Rwf15 billion three-year bond in November last year, which was oversubscribed by 176.39 per cent.

Earlier, Rwangombwa had encouraged local firms, individuals, co-operatives and SACCOs to invest in government paper that ensures a good return on investment.

"It can also be used as collateral to secure loans in the country,” he said at the beginning of February while inviting bids for the bond.

Commenting on the increasing appetite among Umerenge SACCOs for government paper, Robert Mathu, the Capital Market Authority chief executive of officer, said by diversifying investments and savings, the SACCOs seek to strengthen their capital base. "This is a positive move by SACCOs because they will get an opportunity to diversify their portfolios, accumulate savings and build their capital base so that they able to serve their members in the long-run,” he said.

Mathu also said the growing response from SACCOs could be a result of the government and capital market’s awareness campaigns that were conducted countrywide.

"Now they have realised that they can get a better return on their investment when they invest in Treasury bonds,” the CMA chief said.

Government and stakeholder have been carrying out consistent awareness campaigns across the country since 2014, which are yielding positive results considering the growing number of retail investors over the past nine months.