The Bhutanese Leading the way.
The private sector is urging key reforms to the Economic Stimulus Plan (ESP), stating the slow disbursement of funds, procedural hurdles, and limited sectoral coverage as major roadblocks to its effectiveness.
Upon invitation from the Economic and Finance Committee (EFC) of the National Assembly, the Bhutan Chamber of Commerce and Industry (BCCI) and the Association of Bhutanese Cottage, Small and Medium Industry (ABCSMI) shared their observations and feedback on Phase I of the ESP. Their presentation included updates on the number of projects approved, the amount disbursed, challenges encountered, and proposed recommendations for improvement.
According to the BCCI, only around Nu 1 billion in loans have been disbursed to the private sector so far, despite the ESP’s aim to stimulate economic activity. The chamber highlighted several critical challenges, notably the lengthy application procedures, extensive documentation requirements, and limited experience among newly recruited officials responsible for loan appraisals, which has led to delays in processing.
Another major issue raised was the limited sectoral coverage under the ESP. Key employment-generating industries such as hospitality, export-oriented businesses, and mining have reportedly been excluded from the plan’s benefits. Furthermore, there has been a lack of consultation and awareness initiatives targeted at the private sector, contributing to underutilization of the scheme.
To address these concerns, BCCI suggested several ways forward. These include the establishment of a Credit Guarantee Agency, expansion of credit facilities to all economic sectors, enhanced awareness at the grassroots level, and the introduction of collateral-free loans for scale-up financing. Additionally, restructuring non-performing loans (NPLs) was recommended to prevent the closure of businesses facing financial strain.
BCCI also conducted in-house studies and is preparing to submit its findings and proposals to the Economic Development Board (EDB) for consideration in Phase II of the ESP. Among the proposals is the idea of offering 50% equity partnerships to the private sector, allowing the government to reduce risk while ensuring private sector commitment to business ventures. The chamber also reiterated the importance of including all economic sectors under the ESP to maximize employment generation and support national economic recovery.
