Economic affairs minister says caution needed in releasing loans

Business: Over a hundred of Business Opportunity and Information Center (BOiC) loan applicants in Trongsa and Bumthang have either got their proposals rejected or awaiting disbursement for a long time.

During a public meeting with the economic affairs minster, Norbu Wangchuk, Trongsa thromde thuemi, Karma Latho raised concerns over BOiC’s sluggish service delivery.

Karma Latho said BOiC has benefited people across the country. But he shared a women applicant from Thruepang, Kunzang Choden’s experience of running from pillar to post with her business proposal since 2013. After much hardship, Karma Latho said the women could not avail the loan because dzongkhag rejected the land lease.

Bakery, resort and recycling units are some other proposals turned down from Thruepang and Sherubling.

Last year, Kinzang Thinley from Thruepang took loan to write a proposal for a confectionery business he wanted to start. His proposal was rejected and has been unable to repay the loan he took to write the proposal.

Another applicant from Sherubling, Ugyen Tshomo spent over Nu 80,000 in developing project proposal for a cafeteria. Her proposal was also turned down upon submission to BOiC.

“They told me no loans are available for services,” Ugyen Tshomo said. The BOiC, she said should have cautioned the applicants during the sensitization programme if loans weren’t meant for services. “I tried to get loan from BDBL but had to drop it after finding the interest rates too high,” she said.

Similarly, most applicants in Bumthang are also left disappointed.

Chokhor gup, Sangla said most applicants from his gewog did not receive the four percent interest-bearing loan, while only a handful got through.

“Those who haven’t received the loan are still grouching as to why their proposals are turned down despite submitting all the necessary documents,” Sangla said.

People who applied for Nu 100,000 loan for agriculture make up the majority of the applicants in Bumthang. These applicants mostly have applied to buy potato seeds and fertilizers.

“Everyone rushed to BOiC instead of going to Bhutan Development Bank Limited (BDBL) because of collateral free and four percent interest loan, only to be disappointed,” Ura Gup, Dorji Wangchuk said.

By the end of 2015, one project worth Nu 2.7M and over 20 applicants for agriculture loan of Nu 100,000 received the fund in Ura.

“But most of over 100 applicants from here still did not receive the loan yet,” Dorji Wangchuk said.

Clarifying on the issues, Lyonpo Norbu Wangchuk said it is also government’s aspiration to release loan to every applicant, as far as possible. “But situation demands caution,” he said.

“Because the fund itself is a government of India assistance and collateral free nature of the loan, its important to ensure that credit is released under proper procedure to avoid misuse,” Lyonpo said.

The minister said BOiC has to be careful because loan proponents have started adopting deceptive methods to secure the loan.

For instance, proposals were put to purchase jersey cows with BOiC loan. Upon inspection it was found that ownership of the same cow was transferred from father to son and then to other siblings in the same family.

Because of such practices, he said procedures had to be tightened involving field verification that consumes more time.

Irrespective of BOiC’s fate amidst the cabinet’s decision to close its shop, the minister assured that the government would continue to expedite the loan processes at minimal interest and collateral free.

Tempa Wangdi, Bumthang