Districts to borrow funds from private individuals

The woes municipal councils have for long faced in their quest to secure enough funding from the central government for development activities could soon end after Capital Markets Authority unveiled plans to start issuing municipal bonds to help districts raise development funds.

The woes municipal councils have for long faced in their quest to secure enough funding from the central government for development activities could soon end after Capital Markets Authority unveiled plans to start issuing municipal bonds to help districts raise development funds.

Municipal bond, which is like the Eurobond issued by government in April, will become a tool through which districts can borrow funds from individuals or private firms and repay with interest.

The new Capital Markets Authority (CMA) guidelines are expected to come into force next month, creating a window for districts to source for funds to inject in projects without waiting for government funding.

CMA officials said only district authorities, the City of Kigali, or other authorities legally entrusted by government to control a municipal entity, can issue municipal bonds.

“Funds raised from municipal bonds will be used for infrastructure projects such as water supply, sewerage and waste management, housing, roads, bridges and flyovers,” Charles Furaha, the CMA legal and corporate manager, said in an interview.

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