In the last 18 months, the Business Opportunity and Information Centre (BOiC), soon to become a State Owned Enterprise (SOE), has approved 2,074 projects worth Nu 593 mn.
Lyonchhen Tshering Tobgay said BOiC, started around 18 months ago, has implemented and approved many projects. He said that out of 2,074 approved projects by BOiC, 1,151 projects worth Nu 357 mn are under the implementation phase, while another 1,000 projects are under consideration.
He also said BOiC has approved 235 projects under Revolving Fund (RF) I, and most of these are Small and Medium Enterprise (SME) projects.
Of the 235 projects approved for RF I, 142 have already started implementation for which Nu 190 mn has been disbursed.
RF II projects are those given to farmers, for agriculture and animal husbandry, and number of projects approved is 1,839 totaling to Nu 167 mn approved by BOiC under RF II.
“This is going to have far reaching implications and benefit to our economy, as a whole, in particular to a rural economy.” Lyonchhen added.
However, he also said that people seems to be misunderstanding that BOiC is not delivering the goods.
“This is the first time that they have had access to this much money, for this many projects, in a very short time. It does take time to review the projects,” he said.
Lyonchhen highlighted two reasons for the delay. The first reason being that BOiC, as a new organization, has had to set up and develop the standard operating procedures, rules and guidelines. The second reason, he pointed out, is many loan applicants are not as honest as they make out to be, for they have no intention of using the money for the reasons stated on paper.
Citing an example, Lyonchhen said, “They will say that they will be buying two cows and they need one lakh for that, but they will never buy a cow and they really don’t intend to buy a cow.”
He also said that BOiC, within six months into operation, ended up tagging up every cow that was bought and sold with the help of the Ministry of Agriculture.
“There are many instances for the RF I projects, especially for small and micro financing, where people already have a project but they write a project proposal that they are going to start. This is because it is a four percent loan and everyone wants to avail it,” Lyonchhen said.
He also said that BOiC cannot distribute the money and approve project indiscriminately, which would be wrong and would be robbing the other Bhutanese of their fair share of opportunity.
“They want to take loan with low interest from BOiC so that they can pay their other loans.” Lyonchhen said.
Lyonchhen said, “There is no RMA regulation on SME banking, and once the regulations are put in place or upon the completion of the regulations, SME banking will be established in country.” BOiC is expected to be a SME bank.