REDCL to come up with special scheme for women, college graduates and rural folk
Policy: After 20-months of operations, the Business Opportunity and Information Centre (BOiC) has closed shop and passed its mandate to the Rural Enterprise Development Corporation Ltd (REDCL), which was launched on May 21.
The REDCL, however, will carry out micro lending activities for non-formal economic activities in the rural areas, meaning that the new state enterprise is mandated to handle the revolving fund-II (RF-II) of the economic stimulus plan.
RF-II has a ceiling of Nu 100,000 per activity at the interest rate of 4 percent and is meant for non-formal rural activities like dairy, poultry and piggery, among others. Of the Nu 5B stimulus plan fund, Nu 400M has been allocated for RF-II.
The Nu 1.9B worth RF-I will however be transferred to Bhutan Development Bank Ltd. (BDBL) to finance cottage and small industries through a special window. This special window will also provide collateral free loans at 4 percent with a ceiling of Nu 8 million per project.
“Whether BOiC or REDCL, the structure is not as interesting as the loan itself,” Prime Minister Tshering Tobgay said during the launch.
He asked the board members of REDCL to initiate special schemes to encourage women entrepreneurs, young college graduates and projects in the rural areas.
Till date, 36 percent of RF-I and 47 percent of RF-II loan recipients were women.
While Nu 2.1 billion from the ESP has been injected into the banks, the Prime Minister said it seems that most banks do not need them. To aggressively pursue the mandate of stimulating the economy, he said REDCL would need more funds.
He talked about the possibility of transferring the liquidity from the banks to REDCL.
Lyonchoen also pointed out that the erstwhile BOiC has done more than the five banks. In the last one-year, the five banks combined have approved 105 projects in production and manufacturing worth Nu 266 million. The BOiC alone has approved 169 projects for cottage and small industries worth Nu 273 million. In addition, the Centre has attended to each of the 29,175 inquiries and created 3,421 jobs, he said. “No other sector has created as many jobs as BOiC,” he said.
The Centre has received 5,251 applications, of which 2,156 projects worth Nu 605 million were approved in 20 months time. “BOiC has delivered success after success,” he said. “It has stimulated our economy.”
Now to build on its success, Lyonchoen said, REDCL will need more people than what BOiC had. He then encouraged all BOiC employees, including the chief executive officer to join the new state enterprise.
PM clears air
Amidst all the criticism directed at BOiC, Lyonchoen said none were constructive.
On legality, the Prime Minister said the government had asked all critics to point out the provisions of law that pronounce BOiC illegal. However, he said no substantial justifications were given till date.
He said BOiC could not continue with questions and issues being raised even after a year and a half in operation, even though the government is convinced that it is not illegal.
With REDCL now incorporated under the Companies Act and having obtained a license from the Royal Monetary Authority, Lyonchoen hopes that the issue of legality will be addressed once and for all.
Another issue that lingered since the beginning was on the delays and rejection of loans. “Since loans were attractive, the BOiC team uncovered outright cheating,” Lyonchoen said adding that stringent screening was necessary. “There were approvals and there were perceived delays,” he said.
Lyonchoen also clarified on Karma Tshering’s appointment as the CEO. “Karma Tshering was a PDP candidate in 2008 not 2013,” he said.
He said the board directors of the erstwhile BOiC selected the CEO and submitted his nomination. Lyonchoen named individual board directors to cross check whether the CEO’s appointment was on political grounds.
“If any of the board members facilitated Karma Tshering’s appointment, please take it to the Anti-Corruption Commission,” he said.
There were also issues on BOiC favoring PDP supporters. “If you know any PDP supporters given loan on party grounds, let me know. This is corruption and I will support you,” he said.
If not proven, Lyonchoen said the allegation is outrageous and dangerous.
However, he pointed out that Thimphu, Paro and Pemagatshel received the highest number of loans from RF-I. DPT won most of the constituencies in these three dzongkhags. Likewise, the highest recipients of RF-II were from Mongar, Paro and Bumthang. “How could BOiC be favoring PDP supporters?” he said.
Nevertheless he commended the CEO and the employees of BOiC for their efforts despite having to bear the brunt of heavy criticism.