A capital market operator, Mr Boniface Okezie, on Tuesday envisaged the coming of new form of banking for the poor with the introduction of savings bond by the Federal Government.
Okezie, President, Progressive Shareholders Association of Nigeria, told the News Agency of Nigeria (NAN) in Lagos that the bond would deepen the saving culture of the people.
He said that the initiative was sacrosanct because majority of the rural dwellers and others were unbanked.
NAN reports that the Federal Government Savings Bond opened for subscription on Monday on the Nigerian Stock Exchange (NSE).
Okezie said: “Since the lower class of the population is in majority, it will accelerate the creation of a large pool of funds to fix any social investment.
“The active involvement of this class in such bond will also create a sense of belonging for the lower class of the society.
“The government needs to do a lot of awareness campaign for those in the rural areas to make them belong in the day to day running of the business of the country.
“This system of pooling resources together, in my opinion, is lacking in the country whereas other climes it is used to deepen financial inclusion.”
Okezie said that the idea was quite novel and would lead to entrenchment of saving culture in the country over time.
He said that the saving bond, if natured by the appropriate authorities for a long time, could allow for new form of banking for the poor.
“This idea is imperative to our development since the accruable is not taxed, “he said.
The FGN Savings Bond is being issued at 13.01 per cent interest rate to retail investors.
The DMO said the bonds will be “good for savings towards retirement, marriage, school fees, house projects, among others.”
According to the debt office, new issues will be sold every month.
The minimum subscription will be N5, 000 and the maximum N50 million.
The bond is to enable the government depend on local borrowing to fund more than half its budget deficit, which is expected to reach N2.36 trillion this year.
The government issued a 1billion dollar Eurobond last month and it is now seeking approval from the National Assembly for an additional 500 million dollar Eurobond.
Last week, it said it would offer a N20 billion “green bond” in April.
The government also plans to sell a 300 million dollar Diaspora bond this year. (NAN)
STA/JI/TA