Three commercial banks, Druk PNB, Bhutan National Bank (BNB), and Bank of Bhutan (BoB) has so far released education loan worth Nu. 8.969 billion as of early February 2023.
The education loan, reopened under the new loan scheme by Royal Monetary Authority (RMA), Special Education loan is offered in two loan types, secured and unsecured. People with mortgages and collateral, in terms of land and building or any immovable property worth 80% of the loan is qualified for the secured loan type.
Those without a collateral worth 80% of the loan value or those without any collateral will qualify for the unsecured loan type.
Druk PNB has so far sanctioned 40 accounts worth Nu. 135 million under secured loan type. Secured loan type is offered at interest rate of 9.5% by the bank.
In unsecured loan type, the bank has so far sanctioned 47 accounts worth Nu. 154 million. Unsecured loan type is offered at interest of 10.5%. In total, Nu. 289 million has been sanctioned so far.
The loan scheme has a loan ceiling limit of 5% for unsecured loan and 10% for secured loan type. With a loan portfolio of Nu. 16,740 million, Druk PNB has yet to reach 1% of loan ceiling limit for both the loan types.
BoB offers secured loan type at 8.5% and unsecured at 9.5%. So far, in secured loan type, BoB has sanctioned loan worth Nu. 4.72 billion and in unsecured loan type, it has sanctioned loan worth Nu. 1.20 billion. In total, BoB has so far sanctioned Nu. 5.92 billion.
As for the loan ceiling limit, BoB has reached 7.27% of the limit for secured and 1.84% of the limit for unsecured loan type.
BNB offers secured loan type at 9% and unsecured at 10%. So far, in secured loan type, BNB has sanctioned 754 accounts worth 2.56 billion and in unsecured loan type, it has sanctioned 62 accounts worth 200 million. In total, BNB has so far sanctioned Nu. 2.76 billion.
For people seeking loans, the necessary paperwork is properly completed loan application form, signed undertaking letter, CID Copies of the applicant’s copy and two passport-sized pictures, an offer letter from the institute, college, or university, a cost breakdown for the VISA need, a copy of the marriage certificate (for those who are married), and the applicant’s and the spouse’s family tree are also required.
The only additional information required for customers looking for secured loans is a promise of unencumbered assets and an agreement from the asset’s owner to use it as collateral for the loan.
A CIB report must be generated for each household member in order to ensure that none of them has an NPL and that none of them has a net annual taxable income exceeding Nu.1 million. Additionally, the most recent tax returns from the DRC must be submitted for each household member if one chooses to apply for an unsecured loan without collateral.
The T-Bank which started this whole loan scheme has not yet shared its figures, but if it is included then the special education loans given will have crossed even Nu 9 bn.