20 top hoteliers in the country alone benefited by Nu 228M in the last six months
The Druk Gyalpo’s Relief Kidu (DGRK), introduced in April 2020, has helped about 52,644 individuals sustain livelihoods and more than 139,096 loan account holders benefited from the interest payment support during the Covid-19 pandemic.
Of the 52,644 individuals who were granted income support relief kidu amounting to Nu 2.25 billion (B) including over the last one year from April 2020 to March 2021, 40 percent had applied in the first month itself, according to the summary report compiled by the kidu relief office.
The kidu amount includes child support kidu of Nu 70.89 million (M) which accounted for about three percent of the total kidu granted in the last one year.
The relief kidu was granted in phase wise for which individuals from all sectors were required to re-apply in each phase. Over 75 percent of the applicants from each phase have re-applied in the subsequent phases. Phase III, which initially covered October, November and December 2020, was extended for another three months till March this year without the need for re-application to provide immediate relief during the second national lockdown.
The summary stated that 18,867 individuals or 35.8 percent of the total had applied in all phases. 14.7 percent had applied in phase I, 5 percent in phase II, and 9.8 percent in phase IV.
The number of new applicants, according to the report, had dropped to 217 in November 2020, and increased to 3,627 in December and further to 4,725 in January 2021 during the second lockdown. However, there were only 87 applicants in March 2021.
Of the total applicants, 45,766 accounting for 86.9 percent received kidu at least once. A substantial proportion of them received lockdown support kidu. 14.2 percent of the total applicants received kidu for all 12 months while 23.3 percent received kidu once and 10.8 percent received twice.
Child support kidu was granted to 9,614 applicants (18.3 percent of the total applicants) covering a total of 15,464 children. Among them, the majority, 53 percent of them had one child while 35.2 percent had two children. Around 6,000 children were supported each month. By amount, 9,339 individuals have received Nu 100,000 or more as of March 2021. This included child allowance if they had children.
The highest increase in kidu disbursement was observed in August 2020 and January 2021 which saw an increase of 71.9 percent and 84.9 percent, respectively, because of the grant of the lockdown support kidu.
The ratio of number of months a person has received kidu over the number of months they have remained active (i.e. applied in a phase and not withdrawn) is the highest for employees working in the tourism sector (86.2 percent) followed by returnees (81.8 percent). The average number of times persons working in the mining sector applied for kidu is low at around 5.9 percent as compared to 7.9 percent for the other two sectors. “These were mainly people working in the boulder export which was heavily affected during the initial months of the pandemic,” the report stated.
A member of the fom DGRK said that the kidu was introduced after His Majesty The King envisioned that Bhutan’s economy and people’s livelihood would be adversely impacted due to the Covid-19 pandemic. “Such noble and farsighted visionary leadership of His Majesty has helped us in shielding from some of the most devastating consequences,” he said.
Interest payment support (IPS)
On the command of His Majesty, the National Resilience Fund (NRF) was also set up in April 2020 to provide economic relief, timely and substantive support to individuals and businesses and adoption of comprehensive health measures through the DGRK.
Disruption of business operations, and partial or complete loss of employment and income pose difficulties in debt repayment and place added pressures on the financial health of individuals, businesses, and the economy as a whole.
As an immediate response to mitigate the impact of Covid-19, the grant of interest payment support Kidu by His Majesty The King provided across-the-board relief to all borrowers including non-performing loan (NPL) clients. Additional monetary measures such as deferment of loan repayments and provision of working capital and short-term loans at concessional interest rates were rolled out to ensure that relief measures are adequate and inclusive.
Close to 139,096 loan account holders, including 17,766 NPL benefited from the interest payment support. Total number of beneficiaries includes 60,002 salaried individuals and 79,094 business accounts.
In the last 12 months, Nu 11.064B has been granted as kidu from the interest waiver facility. Of the total amount, Nu 1.15B was granted to salaried individuals. Businesses received Nu 9.91B.
His Majesty granted 100 percent of IPS for the first six months followed by financial service providers providing 50 percent of the IPS.
DGRK officials are compiling reports on which companies or businesses and individuals benefited the most from the kidu so far. Kuensel learnt that hotels and restaurants under the service sector also benefitted Nu 1.02B from the interest waiver and loan payment deferment. 20 top hoteliers in the country alone benefited more than Nu 228M in the last six months. One hotelier in Thimphu alone benefited by more than Nu 44M from the IPS.
At the individual level, civil servants were the biggest beneficiaries in terms of all loans. With the extension of the kidu, some pointed out that those who can afford should not avail as it will put additional strain on the kidu fund. “I feel embarrassed to benefit from the Royal kidu when I am not affected at all,” said one beneficiary.
Meanwhile, the Royal kidu office announced that individuals who are in need of the income support Kidu and borrowers who are in need of the loan interest payment support kidu (50 percent of the loan interest) may apply. Applications will be opened for 3-month cycles over the next 15 months.