The number of cottage and small industries grew from 12,548 in 2013 to 15,193

Report: The growth in number of cottage and small industry (CSI) rebounded by 21 percent last year from negative growth of four percent in 2013, mainly driven by growth in the tourism and hotel sector.

From 12,548 operational CSIs in 2013, the number increased to 15,193.  The year 2013 also witnessed a negative growth of about four percent compared with 2012 because of a slowdown in the economy and various restrictions that followed.

An official from department of cottage and small industry said that those 15,193 CSIs were excluding those funded by Business Information and Opportunity Center (BOiC).

Firms with investment of less than Nu 1M (million), or employing one to four individuals, are categorised as cottage industry, and those with investment exceeding Nu 1M but less than Nu 10M, and employing five to 19 employees, are defined as small industry.  However, in case of conflict between the investment and employment, investment takes precedence.

As per the report on CSI, tourism and hotel industry recorded an increase of 69 percent, followed by real estate, renting consultancy and auto workshop.  More than 42 percent of service sector in the country comprise of hotels and restaurants.

Bhutan’s CSI is dominated by the service and contract sector, which accounts for 89.7 percent of the total CSI.  The production and manufacturing base is however very small.

While there are 9,946 firms in the service sector, contract sector has 3,676 operational firms and 1,571 firms operating as production and manufacturing units.

Of the total production and manufacturing industries, 371 of them are based in Thimphu.  Forest-based industries, like furniture making, hand made paper making, cane and bamboo craft making, mineral based activities, are common in Thimphu and southern dzongkhags.

The department sought information from the commercial banks to determine the amount of funding availed from the banks.

The report states that 164 CSIs have borrowed Nu 266.6M from the banks, but it also stated that commercial banks have no specific definition for small industrial loan.

Druk PNB Bank has financed 24 firms amounting to Nu 121M, and Bhutan Development Bank has financed Nu 108.9M for 137 beneficiaries.

Another finding of the department revealed that most cottage and small industry used their own fund or borrowed from friends and family for start-ups.

CSIs, as of last year, employed about 41,763 people, an increase of 7,517 employees compared with 2013.

CSI accounts for more than 96 percent of total industry in Bhutan.

The BOiC has also approved 304 projects, amounting to Nu 82M, of which 288 projects are for non-formal rural activities, and 16 cottage and small manufacturing and production projects, as of December last year.

However it could not be ascertained how much of these projects are operational.

By Tshering Dorji



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