Choki Wangmo 

Often farmers reap a bountiful vegetable harvest, most of their products are either damaged or sold cheap due to lack of marketing facilities. The launch of the client-friendly investment schemes for farmers, the modus operandi is expected to change.

On Monday, the National Cottage and Small Industry development bank (CSI bank) introduced the investment scheme targeting farmers and youths, which would help address the challenges in agribusiness.

As an investor, the bank will provide potential agribusiness ideas with a loan ceiling of Nu 500,000 after which aggregators would market the products according to the market demand. The farmers can repay the loan after their harvest.

Chief executive officer of the bank, Kinzang, said that until now due to lack of marketing capability and business-know-how among farmers, returns from farming were low.

Currently, he said that there was no change in the mode of doing business, and the farmers did not use the loans from the bank for the intended purpose. It was observed during the nationwide lockdown last month that there was a mismatch of demand and supply of agricultural products, he added.

“The investment model will facilitate a complete business ecosystem from identifying the potential product, input source, clients to marketing products.”

This year, as a pilot project, the bank aims to grow selected winter vegetables like chilli, onion, tomato, and garlic in the south and eastern dzongkhags to substitute import and counter winter food shortages.

“If the pilot project is successful, we will replicate the scheme across the country,” Kinzang said.

The agriculture ministry will provide technical assistance like policy guidance and monitoring of the activities.

The bank is still in the process of developing modalities before the scheme rolls out. Kinzang said that there were plans to involve local government leaders and the Members of the Parliament.

Under the fiscal and monetary measures, the CEO said that the bank provides high priority to non-formal agriculture and CSI sectors through concessional interest rates and favourable lending terms.

Since its launch in February, the bank has disbursed a total loan of Nu 894 million in the non-formal agriculture sector, which constitutes more than 56 percent of the bank’s entire loan portfolio.