Inflation 3.6%, Bond Interest 6.25%: Why Are Some Croatians Changing Their Strategy?

Prices have been rising faster than wages for years, and many citizens complain about a decrease in their quality of life due to this trend. Inflation is one of the highest in Europe, exceeding 3.5%, while interest rates on traditional deposits are significantly lower, leading more people to realize that money “sitting” in their accounts is rapidly losing value. Citizens claim that everything is “twice as expensive” compared to last year and have admitted to seeking new ways to combat this phenomenon.

Stocks are becoming increasingly accessible, but for most citizens, they are too risky and complicated an option, resulting in a smaller number opting for this form of investment. A larger portion of investors has turned to simple logic this year: if inflation eats away 3-4% annually, it makes sense to put at least part of their savings into something that yields more than that, with a somewhat predictable risk.

It makes no sense for all my money to be tied up in real estate and in the bank.

Dario, an e-commerce entrepreneur from Zagreb, speaks very candidly:

– I own an apartment, and that’s fine. But when I added up how much everything is getting more expensive and how much I have sitting in my account, I realized that every year the amount is worth less in real terms. I don’t put everything into bonds, but it makes more sense to keep part of it at 6.25% than somewhere with almost no interest. Especially when it’s something tangible; I see Koykan’s outlets in several places in the city, so I invested part of it in their bond.

Željko, a manager at Pliva, admits:

– I no longer want my entire future to depend solely on real estate and savings. With bonds, I know how much I’m investing, what the interest rate is, and when I receive payments. I know there’s a slightly higher risk, but I’ve already received my first interest payments from both Qela and Koykan, so for now, I’m calm.

Many think similarly; they want to keep their real estate but “pull out” part of their capital from the walls and invest it in something that generates at least a slightly higher return than inflation.

What does the current corporate bond offer provide?

From Escont Partners, a company that specializes in consulting for bond issuance and is currently a leader in that market, we learn that there is currently one company in the offer, and they are preparing to launch several new bonds at the beginning of the first quarter.

Koykan, a domestic street-food chain expanding across Croatia and the region, currently has an open issue of corporate bonds with a fixed interest rate of 6.25% per annum. Part of the funds has already been used for expansion beyond the borders of Croatia, demonstrating their seriousness. The offer is simply and transparently structured, which may be responsible for the growing popularity of this option:

Interest Rate: 6.25% per annum (fixed)

Investment Term: 3 years

Interest Payment: every 6 months

Principal Payment: in a lump sum at the end of the term

Minimum Investment: €1,000 (standard bond)

For larger amounts, starting from €50,000, there is also a convertible bond with the possibility of later conversion into shares according to predefined rules.

According to Koykan’s data, in the first 15 days after the public announcement at the conference dedicated to bonds, more than 30% of the issuance was subscribed, indicating that some investors do not want to sit idly by while inflation slowly erodes their savings. Thanks to the bonds, new outlets have been opened this year across Croatia, the Czech Republic, and Slovakia, and they are announcing the rapid opening of their first outlet in Germany in mid-March in Munich.

For those interested in more about this type of investment, official information about the conditions, specific details about the risks, documentation, and the subscription process are available at:

(This text is not investment advice but an informational publication. Before making any investment decisions, be sure to review the official documents and, if necessary, consult with a financial expert.)