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Message: <blockquote data-quote="Hapuwa" data-source="post: 25156156" data-attributes="member: 165466">Bonds bear a high interest cost to the issuing government so they are hardly used to fund development projects. Governments seek out for soft or commercial loans to fund projects as they bear a lower interest rate comparatively. Normally a soft loan interest gets between 0.5 to 3 percent while commercial loan interest hover around 5 to 8 percent. Project it self or some other favorable condition in the loan agreement is kept as the collateral by the issuing government.Bonds are mainly issued to meet governments general working capital requirements. Unlike loans bonds dont require a collateral so they are essentially an investment tool to the public.</blockquote>

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