The Bhutanese Leading the way.
Loan deferment that ends by 30 June 2024 was a dominant talk held during the consultation meeting on ‘Revitalizing Business Development’ organized by the Bhutan Chamber of Commerce & Industry(BCCI) in collaboration with Dzongkhag Administration, Thimphu, and Thimphu Thromde at the BCCI Hall on 23 April.
The business community also expressed challenges caused by the economic slowdown over the past three years and its impact on their financial stability.
Executive Director of Singye Group of Companies, Phuntsho Wangdi, proposed extending the interest payment period from five to ten years to ease the burden on businesses. He also mentioned that there is a consequence along with the advantages that the business owners receive with loan deferment.
Chairperson of Yarkay Group, Phub Zam, who is also representing the Hotel Association, mentioned paying the accumulated interest for the COVID-19 period within 5 years, in addition to the Equated Monthly Instalment (EMI) for the balance loan will be too much to pay for any business and other related industries, especially the hospitality and tourist industries.
She requested for an extension of the deferment period from 2024 – 2028, and the interest accumulated from COVID-19 period, 2020 – 2023, and the deferment period, 2024 – 2028 should be put into a holding account like the FEIF account, and repaid in equated installment for a period upto 30 years.
BCCI President, Tandy Wangchuk, cautioned against a lengthy 30-year deferment, citing potential risks to banks. Instead, he advocated for a more conservative two to three-year deferment with incentives for timely repayment.
The discussion also touched upon challenges related to high interest rates and explored alternative financing options, such as external commercial borrowings, and the possibility of revisions to ECB guidelines.
Beyond financial matters, there were calls for broader policy reforms, including the enactment of a Private Sector Act, streamlining regulatory processes, and fostering a favorable environment for foreign direct investment.
BCCI aims to present a comprehensive set of recommendations to the government by early May, reflecting the diverse concerns and proposed solutions voiced during the consultation meetings.
