The National Cottage and Small Industry (CSI) Development Bank approved various projects worth Nu 875 million (M) in the last 10 months, according to finance minister Namgay Tshering.
The funds disbursed were categorised as agriculture, livestock, manufacturing, service industry projects and as working capital.
Lyonpo Namgay Tshering, while answering Maenbi-Tsaenkhar Choki Gyeltshen’s query on the provisions of loans from the CSI bank and the government’s plan to provide adequate fund to the bank, said that the bank is a non-deposit-taking bank. “Government is the only source of fund for the bank.”
Lyonpo said the government has invested Nu 720M in the bank.
The bank was upgraded from a micro-financing institution, Rural Enterprise Development Corporation Limited, to a fully-fledged, non-deposit-taking CSI bank in February this year. The CSI bank was established in 2014 as the Business Opportunity and Information Centre (BOiC).
Lyonpo Namgay Tshering said the CSI bank, as a specialised bank promotes the growth of rural, cottage and small industries in the country and lots of people applied for loan because of lower interest rates. “There is no requirement to mortgage for loan amount less than Nu 0.5M. And, for loans above Nu 1M, the business is kept as a mortgage.”
He said that 1,200 projects worth Nu 315M were approved by BOiC.
BOiC was instituted as the Rural Enterprise Development Corporation Ltd (REDCL) in 2016. REDCL till January this year approved 4,400 projects worth Nu 1.3billion.
Lyonpo said that the fund in the CSI bank would be earned issuing the corporate bond. “The National Credit Guarantee Scheme (NCGS) is expected to reduce the burden on the CSI bank.”
The NCGS aims to overcome one of the major impediments in availing credit facilities from financial institutions by providing collateral-free loans for investments in the cottage and small category.
The minister claimed that people complain there is no adequate fund because some applicants might not have met the requirements.