Despite the drive to promote Cottage and Small Industries (CSI), entrepreneurs are confronted with numerous challenges.
“There is nothing that we cannot do,” said one entrepreneur during the BEFIT conference. However, he said convincing the financers and people at the idea stage, particularly banks and the government agencies is a daunting task.
Founder of a mobile App-based business, Drukride, Jigme Thinley Yoezer said stringent collateral requirement and lengthy process involved in accessing loan from financial institutions is the primary challenge. He claimed he had to approach loan sharks to keep his business afloat.
Sangay Tshering, the managing partner of Green e-solutions said that support during the initial phase of a startup has improved a lot. However, he said the financing is mainly for purchase of machinery.
However, he said as the product hits the market and demand grows, entrepreneurs are facing difficulties in scaling-up due to lack of access to finance. “A lot needs to be done at this stage,” he said.
Besides financing, support in terms of skills development and knowledge is crucial at this phase. However, he said startups do not attract talented people by virtue of being a private entity. Losing good people to the government and corporate sector is a usual trend in private sector.
While local consumers grumble about high pricing of locally produced goods, entrepreneurs said that it’s because of the low volume. Even Koufuko International, a DHI company is facing this challenge. The CEO of Koufuko International, Ugyen Dhendup said that high cost of production is a result of low volume. The company, he said has issues with logistics and geographical terrain, which makes transportation difficult and expensive. Standardisation and certification also remain key challenges for the company.
The founder of Greener Way, Karma Yonten also pointed out regulatory barriers as one of the key challenges. For instance, he said he had to halt his business for 14 months to get an environmental clearance for a business that is geared towards waste management.
However, he said there is a need to encourage creativity, problem solving and artistic thinking among youth, allowing them to freely experiment with ideas.
“To facilitate exports and encourage domestic consumption, public procurement rules mandating domestic products is crucial,” said an investment expert, Devendranath Chamroo.
In any venture, the founder of iBest, Tharchen said that leadership is key. Young people, he said must focus on building skills and becoming competent.
On the government’s part, an official from rural enterprise division of agriculture ministry said that the ministry is determined to bring transformation within the 12th Plan. “Market facilities, export network and logistics will be created,” he said adding that price subsidy will also be provided to guarantee market.
In terms of technical support, he said that the division has a dedicated team to work with the proponents of ideas to establish the enterprise.
However, he said farmers and youth must develop value chains, bring innovation and boost production. “We are talking of a region or a dzongkhag as one big enterprise,” he said. The development model currently, he said is such that farmers farm to produce rather than adding value. This, he said must change.
The country has imported Nu 477M worth of cheese and Nu 61M worth of butter in 2018 alone. A dairy enterprise, he said can bring about a “white revolution.” Likewise, the country produces excess maize but, in most cases, it is brewed to make ara. He said there are opportunities to produce cornflakes and other cereal products.
An official from Bhutan Agriculture and Food Regulatory Authority (BAFRA), Gyem Bidha said that the Bhutan Standards Bureau (BSB) and BAFRA are working together to standardise and harmonise some of the certification and other requirements to facilitate effective cross border trade.
The President of Bhutan Chamber of Commerce and Industry, Phub Zam said that young entrepreneurs today are lucky that much resources and time are invested towards helping them unlike the time when she started.
However, the World Bank’s chief economist for South Asia, Hans Timmer said that globally businesses are becoming more informal where conventional regulations and benefits no longer apply. “Centralisation and urbanisation are not necessary,” he said. The government, he said needs to help people working in small informal sectors without regulations because this is the future.
“I don’t know of a single country where growth is sustained without integration into the global market,” he said adding that competition teaches big lessons.
Despite all the efforts and policies, one of the speakers said that both entrepreneurs and government must not overlook the rural populace, which form a major segment of the demography. Some indicated that the country, through the CSI flagship must provide better services in rural areas to eradicate poverty.