𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐒𝐭𝐢𝐦𝐮𝐥𝐮𝐬 𝐏𝐥𝐚𝐧 𝐒𝐡𝐨𝐰𝐬 𝐏𝐫𝐨𝐦𝐢𝐬𝐞 𝐃𝐞𝐬𝐩𝐢𝐭𝐞 𝐃𝐞𝐥𝐚𝐲𝐬

…𝑵𝒖 8.3 𝑴𝒊𝒍𝒍𝒊𝒐𝒏 𝑫𝒊𝒔𝒃𝒖𝒓𝒔𝒆𝒅 𝒂𝒔 𝑶𝒇𝒇𝒊𝒄𝒊𝒂𝒍𝒔 𝑨𝒅𝒅𝒓𝒆𝒔𝒔 𝑳𝒐𝒂𝒏 𝑨𝒑𝒑𝒍𝒊𝒄𝒂𝒕𝒊𝒐𝒏 𝑪𝒐𝒏𝒇𝒖𝒔𝒊𝒐𝒏

By Lhendup Wangmo

Chencho Tshering, the Chief Planning Officer of the Ministry of Finance, shared that a total of 193 applications for concessional loans have been received from participating financial institutions under the Economic Stimulus Plan (ESP). So far, Nu 8.3 million has been sanctioned, with 12 projects receiving approval. ChenchoTshering clarified that while the construction sector is not eligible for these loans, all other sectors, except for housing, qualify for the reinvigoration fund, which offers a competitive interest rate of 4 percent.

Chencho Tshering highlighted the significant challenges that both applicants and financial institutions have encountered during the loan application process. The majority of applications were submitted for the livestock and agriculture sectors, while 47 were for production and manufacturing. “Many people are confused about the loan process, and there have been significant challenges in implementing the Economic Stimulus Plan,” he said.

The Prime Minister, Lyonchen Dasho Tshering Tobgay recently met with CEOs of all financial institutions to discuss the disbursement of loans, showcasing the government’s commitment to addressing the ongoing issues. He explained that the processes followed by banks are essential to ensuring that only viable business proposals receive funding. “Banks have their own processes, and no one can force them to issue loans. Proper research is conducted on business proposals submitted by applicants to avoid non-performing loans,” the Prime Minister emphasized, adding that delays in loan issuance are a result of these necessary evaluations.

To mitigate the shortage of human resources within financial institutions, the government is extending support, with the Bhutan Development Bank Limited (BDBL) playing a crucial role in assisting rural residents in accessing ESP loans. The Prime Minister noted that gewog administrations are actively helping farmers through Community Centers, and officials will travel to Thimphu to discuss key issues surrounding loan disbursement.

Despite some initial setbacks with the ESP rollout, the Prime Minister expressed optimism about resolving the current challenges. “The ESP is not going as planned initially, but we will resolve the issues,” he said. He further explained that during the 11th Five-Year Plan, the establishment of the Business Opportunities and Investment Corporation (BoIC) was intended to streamline the loan process, but allegations of malpractice arose. “Now, with banks given the responsibility for the ESP, they have their own due processes, which is causing delays. While the banking process is crucial, the intent of the ESP is to help ordinary people,” the Prime Minister stated.

A recent meeting with Bank CEOs and the Royal Monetary Authority (RMA) aimed to tackle these pressing issues. During this discussion, it was decided that the government would provide additional facilitation whenever necessary, especially when it comes to assessing business proposals. The Prime Minister acknowledged that banks are exercising caution in issuing loans due to the potential repercussions of non-performing loans (NPLs) on their financial health. “Banks will be held accountable for the NPLs, which they must bear,” he remarked.

In a bid to accelerate the loan approval process, the Prime Minister proposed that banks and BDBL could hire additional staff on a contract basis, with government support to expedite the system. Furthermore, he indicated that personnel from Community Centers would receive training to better assist applicants.