As per the Second Quarter Report published by the Royal Monetary Authority (RMA), the number of Dzongkhags and Financial Institutions taking part in reviewing Priority Sector Lending (PSL) proposals increased from 7 dzongkhags and just 2 financial institutions in the first quarter to 19 Dzongkhags and 7 financial institutions in the second quarter.
The report states that the total number of PSL applications received by dzongkhags increased from 97 in the first quarter to 584 in the second quarter. From a total of 681 applications, dzongkhags approved 513 projects, of which 78 percent were agricultural-CSI projects and the remaining 22 percent were non-agricultural CSIs. Thimphu received the highest number of PSL applications followed by Tsirang and Samtse. Trashiyangtse dzongkhag did not have a single PSL applicant.
Financial institutions collectively received 278 applications, out of which loan approvals were given for 127 projects for Nu138.55 mn and 71 applications are under review with the financial institutions. As of June end this year, Nu 41.69 mn was disbursed by the financial institutions.
13 projects were withdrawn by the clients with few citing high livestock insurance costs and requirement to obtain a paid CSI license, states the report.
The PSL was launched to accelerate the growth cottage and small industries .
Combined with improved access to finance, the PSL Guidelines is expected to complement the Government’s efforts for more inclusive growth and enable the beneficiaries to take advantage of existing infrastructure to boost their incomes and improve their livelihoods in the CSI sector.
RMA mentioned that with the help from the government, numerous support schemes to the CSI sector are ensured through a dedicated Department of Cottage and Small Industry under the Ministry of Economic Affairs, as well as through youth-focused entrepreneurship development programs funded by the Ministry of Labour and Human Resources, while the Ministry of Agriculture and Forests provides several subsidies and support schemes to the agriculture sector.
For knowledge based implementation of the PSL policy on the ground, representatives from the financial sector and the government agencies are also trained through a trainers’ program in priority sector lending at the Financial Institutions Training Institute.