Migrant workers have shown little enthusiasm in buying foreign employment bonds which were launched in a bid to tap remittance cash for development purposes.

 

The government floated foreign employment bonds four years ago inspired by the swelling inflow of money sent home by migrant workers. However, the bonds turned out to be poor sellers. There have been seven bond issues in the last four years, all of them marked by a lacklustre response.

 

The last bond issue of Rs 250 million opened for sale from March 19 to April 7 also attracted few takers. There were altogether 48 subscribers who bought Rs 50 million worth of bonds, said a senior Nepal Rastra Bank (NRB) official. The central bank issues the debt instruments on behalf of the government.

 

The lack of attraction for these bonds among Nepali migrant workers is shown by the fact that the highest number of subscriptions came from Papua New Guinea, which is not exactly a wildly popular destination for jobseekers. Out of the total bond sales of Rs 50 million, buyers in Papua New Guinea accounted for Rs 12.4 million, according to NRB.

 

Likewise, subscribers in Qatar accounted for Rs 1.03 million and Afghanistan Rs 8 million. Other countries from where subscriptions were received are Malaysia, Sudan, Israel, the US, the UK, South Korea, Liberia, Canada, Bermuda and Japan.

 

“This also suggests that Nepalis doing better-paid jobs like in UN agencies, chartered accountants and non-resident Nepalis earning well bought the bonds,” said the NRB official. “It is said that there are 3 million Nepalese working abroad, but only 48 of them subscribed to the bonds. Response was poor from countries where a huge number of Nepali migrant workers reside. The bonds have failed to attract the targeted buyers.”

 

Compared to bond sales in the past, the foreign employment bonds have performed pretty well, but sales have been far below expectations.

 

When foreign employment bonds were first issued on July 16, 2010, sales amounted to Rs 4 million. The next year, when the government issued bonds worth Rs 5 billion on June 26, 2011, subscriptions totalled Rs 3.38 million. Since then, the subscription rate has improved, but it has remained very poor compared to expectation.

 

The NRB official said that the lack of interest among migrant workers to buy bonds was natural as they had better things to do with their money. Their first priority is running their homes well, educating their children and purchasing land and houses and moving to urban centres, he said.

 

“By putting their money in bonds for five years, they cannot earn much. Moreover, the rate of interest is low, and they can make more by lending their money in their villages,” said the official.

 

Despite the poor response to the bond issue, the government does not have plans to discontinue them. “The response is relatively better compared to the past, and we want to continue issuing the bonds,” said Nawaraj Bhandari, joint secretary at the Finance Ministry.