The Business Opportunity and Information Centre (BOiC) officially launched its activities on August 27. BOiC has an access to revolving funds and a business information centre, a one-stop centre for all information.
The primary purpose of BOiC is to promote the growth of cottage and small manufacturing units and formal rural activities within the country.
Under the Nu 5bn worth of Economic Stimulus Plan (ESP), Nu 1bn is earmarked for the Special Support Scheme (SSS) activities, another Nu 1.5bn will be pumped into the revolving fund I for cottage and small manufacturing industries. The revolving fund II, for non-formal rural activities, has a budget of Nu 0.40bn and the remaining Nu 2.1bn has been allocated towards the Financial Institutes (FIs).
The CEO, BOiC, Karma Tshering, said, “BOiC is prepared and committed to fulfill the mandates given to us by the Royal Government. However, given the enormous task of meeting the objectives of enhancing economic development, support of various government agencies will be critical to realize success.”
According to the Guidelines for Access to Revolving Funds, any Bhutanese nationals above 18 years of age aspiring to set up cottage and small industries or to start a non-formal activity and any individual, cooperatives, farmer’s group registered under the civil society organization is eligible to apply for the revolving funds. However, any project already financed by the FIs is not eligible for the revolving funds.
The guidelines states that BOiC will facilitate and provide access to funds under the revolving funds. The revolving fund of Nu 1.5bn shall provide credit to small and cottage scale activities. The primary purpose of this support is to foster entrepreneurship, stimulate economic activities, add value to domestic resources and create employment. The funding will considered up to a maximum ceiling of Nu 8mn per project.
There will be no collateral requirement and financing will be dependent on the viability of the projects. An average project is estimated at Nu 1mn. By this average measure, over a ten years period, the fund will be able to finance over 1,500 projects. However, the number of projects may vary depending on the actual approved projects. The interest rate is 4 percent.
To promote non-formal activities in the rural areas Nu 400mn is proposed and this fund shall be the baseline financing for individuals and cooperatives engaged in agriculture, livestock, forestry and fishery. This translates into direct capital infusion in rural households to boost overall production level of rural communities, the guidelines states.
The guidelines also states that the fund shall be the most concessional collateral free support provided to individual and cooperatives. A household or a cooperative may be extended this fund based on the practically of the proposal, a sum of up to a maximum of Nu 0.10mn project. This translates to a benefit for 4,000 projects assuming an average project size of Nu 100,000. The cost of fund has fixed at 0 percent repayable within ten years and the landing rate has fixed at 4 percent at highly concessional rate of interest.
PM Tshering Tobgay said, “Nu 5bn will help to ease the rupee situation that will reduce the trade deficit and improve the Balance of Payments by promoting economic activities in the country.”
It also states that the fund application is available online through BOiC web-based application system. The applicant will have to register first and submit the scanned project in the BOiC system. BOiC will also accept forms and applications and proposal via post and hand delivery directly through walk-in.
The Managing Director, BDBL, Pema Tshering, said, “ The objectives and mandates of BDBL to service rural, cottage and small industries in rural areas conforms to BOIC, as both the agencies have similar target groups. Therefore, this partnership of BOIC and BDBL is an excellent collaboration and arrangement to deliver the financial services effectively and efficiently for the benefit of the Bhutanese public.”
The revolving funds of Nu 1.9bn will manage in adherence to the fund management guidelines issues by Ministry of Finance. The MoF and RMA will manage and monitor the funds. While BOiC will appraise and approve projects, and thus provide access to funds, the post fund approval and financial services provided by BDBL.
The Prime Minister Tshering Tobgay and Indian Ambassador Gautam Bambawale launched the BOiC and access to revolving funds and business information centre.