Revolving funds (RF-I and II) of Nu 1.9B injected into the economy through the economic stimulus package has helped start 2,632 projects related to livestock, agriculture, and cottage and small industries.
The Rural Enterprise Development Corporation Limited (REDCL) was formed following an executive order to cater to the RF-II (non-formal rural activities) after the Business Information and Opportunity Centre (BOiC) closed its shop. RF-I, directed for cottage and small industries, was handed over to the Bhutan Development Bank in the interim.
REDCL has received 6,026 applications, of which 2,333 pertains to livestock, 3,315 for agricultural activities, 345 for manufacturing. The remaining were classified as “others”.
As of September this year, the 2,632 approved projects received more than Nu 191M. More than Nu 100.85M is yet to be disbursed. In total, REDCL and BOiC have approved projects worth Nu 291.89M.
Of the total fund disbursed, Nu 78.75M was sanctioned as loan for livestock activites like dairy, piggery and fishery. Nu 105.5M was disbursed for agricultural activities. Loans for manufacturing sector remains subdued at meagre Nu 6.5M.
This has happened despite the fact that manufacturing sector (RF-I) is entitled for loan upto Nu 8M. However, even the ceiling of RF-II, which includes non-formal rural activites, was also revised from Nu 100,000 to Nu 500,000.
Some of the success stories of the RF include what officials call the white revolution in Tsaluna, where some 30 individuals have availed of subsidised loans to buy jersey cows. The cooperative supplies milk to the capital.
In terms of poultry, officials said that the country is not only self-sufficient, but has also started exporting eggs to India because of the growing poultry farms.
The Khengrig Namsum Cooperative’s vegetable and bamboo shoot production is another success story. A group of fresh graduates took up farming. The cooperative supplies organic vegetables to more than 100 schools today.
The country has started to produce watermelon for the first time from Saling in Mongar. The project was undertaken by a Class 10 dropout in Mongar, who has employed his relatives and school dropouts in the gewog.
Dodo, is another beneficiary, who is supplying his locally made shoes to the schools. With growing demand, he had to shift his production unit from Thimphu to Phuentsholing as he need more people in the production line.
Despite success stories, the rate of approval has been slow. A fund of about Nu 1.9B was injected into the economy as revolving funds. Even after more than three years of implementation, not even half of the fund has been disbursed. Moreover, there are some projects that have failed and recovery has been an issue.
However, since the inception of BOiC and REDCL, growth of cottage and small industries has been increasing at 15 percent, according to annual reports from the Department of Cottage and Small Industries.
As per the Employment Survey conducted by the department in 2015, the average number of people employed by cottage industry and small industry is 3.6 and 5.45 per industry respectively. The average number of people employed by the construction industries is 4.7. The total number of people employed by the CSI stood at 92,322 as of May 2017.
Cottage and Small Industry constitutes more than 96 per cent of the total industries licences issued in the country. As of May 31, 2017, provisionally, there were 20,143 licensed CSIs in the country as compared to 17,364 as of June 30, 2016. A total of 2,779 licences were issued in the 11-month period.