Citizens of Montenegro will be given the opportunity for the first time to invest directly in the state by buying bonds with a yield above 3%. This instrument is intended not only to provide the population with an attractive way to invest, but also to revive the local capital market.
A new approach to government borrowing
The Ministry of Finance announced, that it plans to place the first issue of government bonds available to individuals. The amount is expected to be no more than 100 million euros. As the head of Erste Bank's Investment Banking Service, Alexander Scekic, explained, for the project to succeed it is important to conduct a large-scale information campaign, which will explain to citizens the benefits and the level of return from such an investment.
Why this is beneficial for both citizens and the state
According to Scekic, the bond issue will allow the state to raise funds on more favorable terms than with traditional borrowing. For citizens, it will be an opportunity to place savings at interest rates exceeding the yield on bank deposits.
“Citizens will be able to direct surplus funds into government bonds and receive income that is higher than ordinary deposit rates. This is both profitable and safe,” the expert noted.
Scekic 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 working in neighboring countries. In Croatia, this instrument has been successfully used for several years in a row: the yield there also exceeds 3%. In 2023, Croatia raised about 750 million euros, and in 2024 — already 1.2 billion euros.
Prospects and possible challenges
Scekic reminded that in Montenegro, attempts to issue bonds for the population were made before — in 2017 and 2019. However, success was not achieved then: most of the securities were bought by banks and insurance companies, while citizen participation was symbolic.
Now, however, taking into account high banking liquidity and record volumes of private savings, the chances of success are higher. The expert is convinced that with a well-executed campaign and trust in the state, bonds can become a sought-after instrument for ordinary people as well.