The government is planning to launch a retail bond market in 2025 as part of the government’s efforts to diversify its public debt instruments, a government source told EnterpriseAM. The move would allow individuals for the first time the option of purchasing government debt instruments and reduce the government’s debt service payments, we were told.

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Retail bonds? A government-issued retail bond is debt that is sold directly from a government to individuals. Countries issue retail bonds like the US Savings Bonds and UK Premium Bonds as a way to borrow money from the public in exchange for interest payments or some other type of return. Unlike some other forms of debt, government-issued retail bonds are stable, predictable, and often cheaper, with the added benefit of being an effective monetary policy tool if need be.

The move comes amid an uptick in interest in treasury bills and bonds, which was driven by individuals investing in the instruments through custodians and dealing banks. Adjacent to this is an upcoming study by the government on how to diversify public debt, which is nearing completion, the source told us.

The effort has already got the backing of the World Bank, which is helping to study and test the proposal, our source told us. The legislative framework around who can trade in public debt instruments and other regulatory measures for banks and the Financial Regulatory Authority has yet to be made ahead of the launch.

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