FGN savings bonds targeting small savers to open March 13th
The federal government of Nigeria’s savings bond for small savers would be unveiled on March 13, 2017 to provide retail investors to partake in infrastructural development of the country as well as make money on their investments.
The bond will be issued by the Nigerian debt Management Office (DMO), which has finalized plans to float the savings bond to investors. The product will be offered to the investing public through offer for subscription at an interest rate to be determined by DMO.
The DMO has the vision to be one of the leading public debt management institutions in the world in terms of best practice and contribution to national development.
The FG savings bonds, according to the DMO, are debt instruments with the aim of mobilizing resources from the general public, especially individuals and small savers.
The rationale behind the issuance of the savings bond by the FGN is to deepen the national savings culture, diversify funding sources for the government and establish benchmark for other issuers. The commencement date for the issuance is 13th of March, 2017.
The DMO revealed in a circular that minimum subscription amount for the bond is N5, 000.00, with additional investments in multiples of N1, 000.00 and maximum of N50, 000,000.00.
The product will be issued monthly in tenors of 2 and 3 years, with quarterly payment of interest to investors. The bond is expected to be listed on the Nigerian Stock Exchange to guarantee liquidity.
The FG savings bond include would help to encourage financial inclusion among low income household and also guaranteed returns on investment.
The income from FGN savings bond investment are exempted from tax, the investment can be used as collateral for loan. The coupon which is above average bank savings rate remains attractive, while providing steady stream of income on quarterly basis.
