Minibonds are a small but growing phenomenon in public finance. Todd Ely, a municipal finance professor at the University of Colorado-Denver, compares minibonds to World War II-era war bonds, with a local twist. The idea is to give local residents access to an investment that’s usually only open to wealthy outsiders. “The notion of being able to connect residents to financing of projects they actually benefit from on a daily basis is pretty powerful,” he says.
But such sales are typically more patriotic than practical, Ely says. Denver, which has issued minibonds for years, struggled to build and maintain its online user system, Ely says, and high costs have plagued minibond programs elsewhere.
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