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Dechen Dolkar

Small and medium enterprises (SMEs) have no access to credit facilities to scale up their business.

This was one of the main concerns raised during the sensitization of credit lending schemes between private sectors and financial institutions.

SMEs also complained about the long process to avail loan and not easy access to credit facilities.

Financial institutions highlighted lending schemes including different interest rates and terms.

Dagana dzongkhag’s business development committee member, Changa Dawa, said while all financial institutions claim they provide agriculture loans while they present their loan products, only Bhutan Development Bank (BDB) and National CSI bank provide it at the ground.



He also said businesses were affected during the pandemic and SMEs were not able to pay their loans on time.

Changa Dawa also said the record maintained by the Credit Information Bureau (CIB) is not good. “It is very difficult to get additional loans from the bank to upscale the business if the record with CIB is not good.”

He also said that although they have good business proposals and submit all required documents, loan gets rejected if the applicant has no personal relationship with bank employees.

“I have come across some bank officials telling clients on the face that they don’t know about them,” Changa Dawa said.

Similarly, a business development committee member from Paro, Kinga Norbu, said that the procedure for applying for loan is long and complicated.

He said banks should streamline the process.



Another business development committee member from Dagana, Sangay Wangmo, said when SMEs go to avail group guarantee loans they were told that they should have collateral.

Private sector representatives requested group guarantee loans should be given and the bank should provide loans for those who have been paying continuously.

They asked banks to accept the land mortgage from rural areas and not limit it to urban areas.

An official from BDBL said they stopped SMEs loan, which is provided as group guarantee loan to members of the Bhutan Chamber of Commerce and Industry (BCCI) due to high non-performing loans.

He said they are in the process of talking with Royal Monetary Authority to lift the loan to SMEs and to increase the ceiling up to Nu 500,000.



The bank official said that the group guarantee loan is collateral free.

Bank officials mentioned that for easy access to finance, business ideas should be unique and should have value added to the products.

European Union (EU) Bhutan trade support’s national programme coordinator, Rinchen Tshering, said they wanted to bring together private sector and financial institutions to share information regarding various lending schemes.

“It is also to create accessibility for private sector so that they can make informed decision,” he said.

Rinchen Tshering said the recommendations will be submitted to the banks and RMA to address the issues.

Meanwhile, Bhutan Chamber of Commerce and Industry (BCCI), in collaboration with the International Trade Centre (ITC) as a part of the implementation of the European Union (EU)’s Bhutan trade support project, is conducting a nationwide awareness-raising programme on credit lending schemes.



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