President of the BCCI, Tandin Wangchuk

As the end of the loan deferral comes up in June 2022 many business entities will be unable to pay loans: BCCI President

Many business entities have been affected in the wake of the COVID-19 pandemic, especially now, after the lockdown 4.0 is imposed.

To make matters worse, the loan deferment scheme, which is valid until June 2022, is coming to an end. Since most business entities have been running on losses, they will not be able to pay back the loan this time, at least, according to the President of the Bhutan Chamber of Commerce & Industry (BCCI), Tandin Wangchuk.

“We have talked to the government to come up with necessary interventions about the loan, taking the current plight into consideration. The government has got to come up with some kind of contingency plans, which will save the private sector from a certain economic jeopardy since the Omicron has caused a huge dip in economy for almost all the sectors. I think we can look forward to the government looking into the matter and coming up with alternative measures since it is pretty certain that almost all business entities will not be able to repay the loan this year,” said Tandin Wangchuk.

The Director of Financial Regulation and Supervision Division, RMA, Gopi Nepal, said, “It is indeed true that the loan deferment is ending in June 2022, but as of now, we have yet to decide and plan our course of action since we still have time. It will be decided in due course of time, but for now, I cannot say what will happen after the deferment term has ended.”

As per BCCI, the economic recovery and economic way forward, especially for the worst hit entities like, SMES (small and medium-sized enterprises), and all other sectors that have been negatively impacted is being studied.

“Works have been delayed to due to lack of skilled manpower, production halted and services impacted. Thankfully, the new strategy that the government will come up with from mid-April (where lockdown will not be imposed even if community cases are detected) will significantly aid in the recovery of the much needed economy of the country. Keeping that in mind, I hope the government is generous enough to consider favorable options for our private sector,” said the BCCI President.

The Government has affirmed that more numbers of RT-PCR centers has been established.

Regarding the tourism sector, it will open up gradually, with mandatory quarantine of incoming tourists expected to come down, as per the Governments directives. 

“We haven’t come to a logical conclusion as to what will happen after the loan term has ended. There is a dedicated team in RMA working on that,” said the Finance Minister, and he further added, “We are making a transition from Phase 1 to Phase 2 in dealing with the virus, but that doesn’t mean we are surrendering or compromising. As we transition to Phase 2 with mass vaccination, the economy is definitely expected to rebound.”

The Financial Institutions and RMA have been looking at various options, and one of them is that while the blanket deferral may not continue the loan terms could be extended giving more time to people to pay back. However, this is not yet finalized.  

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