𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐒𝐞𝐜𝐭𝐨𝐫 𝐅𝐚𝐜𝐞𝐬 𝐂𝐨𝐬𝐭𝐥𝐲 𝐚𝐧𝐝 𝐂𝐨𝐦𝐩𝐥𝐞𝐱 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬 𝐢𝐧 𝐀𝐜𝐜𝐞𝐬𝐬𝐢𝐧𝐠 𝐄𝐒𝐏 𝐋𝐨𝐚𝐧

…𝑫𝒆𝒍𝒂𝒚𝒆𝒅 𝑨𝒑𝒑𝒓𝒐𝒗𝒂𝒍𝒔 𝒂𝒏𝒅 𝑫𝒐𝒄𝒖𝒎𝒆𝒏𝒕𝒂𝒕𝒊𝒐𝒏 𝑾𝒐𝒆𝒔 𝑭𝒓𝒖𝒔𝒕𝒓𝒂𝒕𝒆 𝑨𝒑𝒑𝒍𝒊𝒄𝒂𝒏𝒕𝒔

By Yeshey Lhadon & Lalit Gurung

The inaugural Private Sector Conference in Bhutan has shed light on rising discontent within the business community regarding the implementation of the Economic Stimulus Program (ESP). Aimed at revitalizing the economy, the ESP has been criticized for its bureaucratic hurdles, leaving many private sector members frustrated and financially burdened.
“Most of the private sector members are not happy, although we are grateful for the ESP scheme,” said Tandy Wangchuk, President of the Bhutan Chamber of Commerce and Industry (BCCI). According to him, small and medium enterprises (SMEs) often incur costs of Nu 300,000 to Nu 400,000 to fulfill loan requirements, with no guarantee of approval.

The ESP, launched on May 19 with Nu 15 billion support from the Government of India, aims to bolster economic recovery post-Covid-19. It prioritizes domestic production, job creation, and foreign currency reserve improvement. However, the process’s complexity and the high upfront costs required to apply for loans have overshadowed these objectives.

Initially disbursed through five banks and two non-banks, the ESP was later centralized under Bhutan Development Bank Limited (BDBL) to streamline the process. Despite this, the first phase of the program has seen significant obstacles.

Tandy Wangchuk said, “About 20 participating members have shown their frustration over the challenges they faced to avail ESP loan.” He added that businesses that initially applied through other financial institutions had to restart the application process with BDBL due to non-transferable documentation.

BDBL disbursed Nu 398.22 million to fund 262 approved projects, but stakeholders criticized the prolonged approval timelines, often exceeding a month, and the lack of uniformity in loan disbursement across Dzongkhags.
“Although the ESP is meant to benefit everyone, the reality is different. The policies are mixed up, and small business owners are struggling to access these funds,” said Palay Dorji, Chairman of the Dzongkhag Business Development Committee.

The second phase of ESP has also faced delays, with only 13 applications approved and six under review. Stakeholders attributed these setbacks to procedural inefficiencies and inconsistent local leadership.

The private sector has united in its appeal for reforms, advocating for simplified application processes and a blended funding scheme to ensure inclusivity and accessibility. “The private sector and the BCCI should have been included in the ESP Committee to align the program’s implementation with the needs of businesses,” said Tandy Wangchuk.

Grassroots entrepreneurs, in particular, have borne the brunt of the program’s inefficiencies. “The ESP is vital for credit availability, investment in green businesses, and innovation. However, its current structure and requirements are stifling its potential impact,” said Jamtsho, President of the Bhutan Early Childhood Education.

During a Meet-the-Press session, Finance Minister Lekey Dorji provided updates on the ESP’s progress, highlighting that Nu 398.22 million had been allocated to 262 projects in the first phase, while 126 applications were declined. To expedite the process, the government has centralized the Nu 3.3 billion concessional loan under BDBL.

With the first phase ending by December 31, concerns persist over the lack of data on project proposals transferred from other financial institutions to BDBL. Stakeholders have urged the government to simplify the process and ensure that the ESP fulfills its promise of fostering economic resilience and growth.

For Bhutan’s private sector, the call for change is clear: a streamlined, inclusive, and effective ESP is essential to drive the nation’s post-pandemic recovery.