The Prime Minister (PM) Dasho Tshering Tobgay acknowledged that the Economic Stimulus Program (ESP) is not progressing as smoothly as anticipated, but expressed confidence that the issues would be resolved.
PM emphasized that while it is crucial for banks to adhere to their procedures, the primary goal of the ESP is to support the ordinary citizens.
As of 8 October 2024, a total of 193 loan applications have been submitted to Financial Institutions (FIs) participating in ESP.
Out of these applications, 12 projects have been approved, securing a total of Nu 8.3 million in funding. The remaining applications are currently under review by FIs.
Notably, 148 of the applications are related to primary agriculture and livestock, while 47 pertain to production and manufacturing sectors.
The Chief Planning Officer at the Ministry of Finance (MoF), Chencho, explained, “Construction businesses are not eligible for concessional loans. However, sectors other than housing can access a reinvigoration fund that provides a 4percent interest subsidy. Furthermore, new startups are not eligible for concessional loans, except for existing startups that plan to expand.”
According to the records from FIs, no applications have been submitted by existing startups seeking funds to scale up. Nonetheless, some startups have reached out to inquire about loan options for their expansion plans.
One of the significant challenges FIs are facing is confusion among the public regarding the application process and eligibility criteria.
To address these challenges, the ESP Secretariat has been working closely with the Royal Monetary Authority (RMA) and FIs to conduct sessions aimed at clarifying the loan application process.
These sessions involve local leaders, such as Gups and Tshogpas, as well as representatives from community centers and the 1199 call center. Furthermore, communication materials have been developed and shared through various media channels to educate the public about the application process.
PM met with the CEOs of all FIs, urging them to assist individuals struggling to complete loan applications and to expedite the loan disbursement process.
PM noted that the government would help facilitate business proposals as needed and suggested that banks, including the Bhutan Development Bank Limited (BDBL), consider hiring additional staff on a contract basis to speed up the process where government will support that.
Additionally, training will be provided for community center to assist applicants, ensuring that support reaches those who need it most.