Citizens of Montenegro will, for the first time, be given the opportunity to invest directly in the state by purchasingbonds with a yield above 3%. This instrument is intended not only to provide the population with an attractive way to invest, but also to stimulate the local capital market.
A new approach to government borrowing
The Ministry of Financeannouncedthat it plans to place the first issue of government bonds available to private individuals. The amount in question is no more than100 million euros. As explained by Alexander Šćekić, Head of Investment Banking at Erste Bank, the success of the project will depend on a large-scaleinformation campaignthat will explain to citizens the benefits and the level of returns from such an investment.
Why this is beneficial for both citizens and the state
According to Šćekić, the bond issue will allow the state to raise funds on more favorable terms than through traditional borrowing. For citizens, it will be an opportunity to place savings at interest rates exceedingthe yieldon bank deposits.
Šćekić emphasized that it is especially important to make the purchase process as simple as possible: the Ministry of Finance will cover the administrative 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 in use in neighboring countries. In Croatia, this instrument has been successfully applied for several years in a row: the yield there also exceeds 3%. In 2023, Croatia raised about750 million eurosthrough bonds for citizens, and in 2024 — already1.2 billion euros.
Prospects and possible challenges
Šćekić reminded that attempts to issue bonds for the public had been made in Montenegro before — in 2017 and 2019. However, they were not successful then: most of the securities were bought by banks and insurance companies, while citizen participation was symbolic.