Government’s quarterly issuance of Treasury bonds that started this financial year has fast become an effective means of recruiting Rwandans into active players in the financial market. The Rwf15 billion Treasury bond issued by the government last week was quickly bought up by local investors, some of them Umurenge Saccos owned by the ordinary folk. In the past, owing to limited knowledge on financial markets, Rwandans watched while financial institutions, using people’s very savings, raked in profits from risk-free government Treasury bills and bonds. But thanks to recent mobilisation campaigns by the Ministry of Finance and Economic Planning, Rwandans have seen a window of opportunity presented by government debt paper to safely invest their savings while at the same time contributing to the country’s development. But the business community needs to go beyond lending government and look at the broader financial markets as a source of cheaper working capital to grow their businesses. Through these successful Treasury bonds, the government has tested the waters and discovered that there is money out there to be borrowed at long-term and more flexible terms. Businesses should, therefore, seize the opportunity by working with the Rwanda Stock Exchange to issue corporate bonds for less stressing debt and avoid the often high commercial bank lending rates. Celestin Rwabukumba, the chief executive officer of Rwanda Security Exchange, has correctly predicted that if corporate borrowers look to the bond market for working capital, interest rates will eventually come down across the board as forces of demand and supply prevail. Therefore, rather than keep lamenting about the high interest rates charged on bank loans, businesses should go for corporate bonds. Not only will this enable them raise long-term capital, it will also help build a financial literate society.
