The Bhutanese Leading the way.
As of the last date of June 30, 2026 a total of 1,188 Bhutanese students had applied for the Economic Stimulus Program (ESP) Education Loan amounting to Nu 1.112 billion (bn).
The ESP Steering Committee decided that from this group, all students who met the eligibility criteria would be given the loan.
The Bank of Bhutan (BoB) was given the task to shortlist the final list of eligible students based on the ESP loan criteria.
The BoB has finally completed the task and narrowed the list down to 1,085 students with the loan now worth Nu 932.32 million (mn).
This means 103 applicants were declined worth Nu 179.68 mn.
A source said that the numbers decreased as some students withdrew their applications while in other cases, they could not meet the requirement for the loan guarantor to have a clean credit history which basically means no non- performing loans.
A guarantor for this scheme is mandatory. The applicant’s parents or legal guardian will act as the guarantor. If the parents or guardians have a poor credit record, the applicant is ineligible for the loan.
A big challenge for the government will now be to secure the funds as the fund left for this round of the loan program was only Nu 168.61 mn.
The fund for now has enough money for the first installment for June or July (two installments a year with two semesters) which will likely be around Nu 150 mn. For those taking 4-year college courses the fund will make payments in eight installments over four years for those taking 3-year courses there will be six installments over 3 years.
So, the ESP Steering Committee and the larger government do have some time to look for resources.
A source said that the Ministry of Finance has been informed about the resource required for the fund. The first priority will be to source is from the ESP itself.
The almost entire Nu 15 bn ESP had already been allocated for various programs but once the Iran war started and fuel prices went up the government reprioritized Nu 2.5 bn from the ESP by cutting the Nu 1.5 bn home ownership loan, Nu 500 mn from the Agriculture and Livestock Development price guarantee scheme, Nu 206.94 mn reallocated from the Concessional Credit Loan (CCL) scheme under BDBL, Nu. 112.585 mn from Tourism Development, Nu 68.51 mn from Cottage and Small Industries, Nu. 39.30 mn from the Creative Industry Development fund and Nu 72.65 mn from Youth Employment, Education and Training fund.
From this Nu 2.5 bn so far Nu 1.823 bn was spent on fuel price support. The initial plan for the government was that once fuel prices come down then the government would apply a Related Adjustment Factor (RAF) on petrol and diesel to recover this Nu 1.823 bn. This would then be used for the Education loan.
The RAF was recently levied at Nu. 7.79 per liter applied to both fuels but this did not last long as fuel prices went up with renewed fighting and blockades and now there is no RAF and instead the government is supporting the price of diesel by Nu 18.63 per liter. This means dipping into the Nu 2.5 bn fund and the Nu 1.823 bn spent will go up.
Apart from the ESP, the secondary option is project tied assistance from donors.
A third option is taking concessional loans from the World Bank or Asian Development Bank to fund the student loan.
From the students who go through around half applied for colleges in India while another half applied for colleges in Bhutan.
The Nu 600 mn ESP loan scheme was launched on 23 July 2025, and during that period, 457 applicants received loans totaling Nu 333.72 mn.
A second announcement was made in January 2026, when 110 applicants received Nu 97.67 mn.
After the first two rounds only Nu 168.61 mn was left but given the huge number of applicants leading to BoB closing the loan on the first day itself on June 2 2026.
This led to a lot of controversy, and the government extended the application date till 30 June, leading to the current scenario.
