For the first time, citizens of Montenegro will be given the opportunity to directly invest in the state by purchasing bonds with a yield above 3%This instrument is intended not only to provide the population with an attractive investment option but also to revitalize the local capital market.
A New Approach to Government Borrowing
Ministry of Finance announced, which plans to place the first issue of government bonds available to individuals. The amount in question is no more than 100 million eurosAs Alexander Shchekich, Head of Investment Banking at Erste Bank, explained, it is important to conduct a large-scale information campaign, which will explain to citizens the benefits and level of profitability from such an investment.
Why is this beneficial for both citizens and the state?
According to Shchekich, the bond issue will allow the state to raise funds on more favorable terms than with traditional borrowing. For citizens, this will provide an opportunity to invest savings at interest rates exceeding yield bank deposits.
"Citizens will be able to invest their excess funds in government bonds and earn income that exceeds standard deposit rates. This is profitable and safe," the expert noted.
Shchekich emphasized the importance of making the purchase process as simple as possible: the Ministry of Finance will cover the paperwork costs, and access to the bonds will be organized through banks.
Regional experience: the example of Croatia
The idea of "people's bonds" has long been used in neighboring countries. Croatia has successfully implemented this instrument for several years running, with yields also exceeding 3%. In 2023, Croatia raised approximately 750 million euros, and in 2024 - already 1,2 billion euros.
Prospects and possible difficulties
Ščekic recalled that Montenegro had previously attempted to issue bonds to the public—in 2017 and 2019. However, those attempts were unsuccessful: most of the securities were purchased by banks and insurance companies, and public participation was merely symbolic.
Now, given the high level of bank liquidity and record levels of private savings, the likelihood of success is higher. The expert is convinced that with a well-designed campaign and increased trust in the government, bonds could become a sought-after instrument for ordinary people as well.
