Central bank governor John Rwangombwa has urged local SMEs and other firms, as well as SACCOs and individuals to invest in government bonds, saying they give a good return on investment.

Rwangombwa, who was commenting on the successful issuance of Rwf15 billion five-year Treasury bond on August 24, said the growing appetite for TBs among investors shows confidence in the local economy.

The bond, which has been oversubscribed by 139 per cent, was dominated by institutional investors, taking 71.3 per cent of the allocations compared to 50.3 per cent in May. 

Retail investors (individuals and SACCOs) dropped to 3.9 per cent from 14.61 per cent and banks got 24.8 per cent, down from 35 per cent in May. 

Out of the 67 applications received, retailers accounted for 49 orders, of which 37 were from individuals, nine from Umurenge SACCOs and three private companies. This is the best performance so far this year; the bond issued in May was oversubscribed by 215.5 per cent, while that the Rwf15 billion bond issued in February got a subscription rate of 226 per cent.

The central bank chief attributed the success of the current TB issuance to the ongoing public awareness campaigns across the country aimed at educating the population about the benefit of saving and investing in Treasury bonds. 

The bond is part of government quarterly issuance programme that aims at raising money to fund the infrastructure projects and support the local capital market. 

"We are happy that more investors, especially retail and institutional participants, are increasingly attracted and confident to invest in Treasury bonds and support our efforts,” Rwangombwa said in an interview yesterday.

The next bond issuance for this year is expected on November 21, according to the central bank statement. The bond issued on August 24 will be listed on Rwanda Stock Exchange on Tuesday, August 30. Its coupon is 12.25 per cent and was arrived through a book-building. The TB’s redemption date is 20/08/2021.