National CSI Development Bank disburses Nu 1.295bn in 16 months of operation

The finance minister says the bank has adequate funds to operate

The National Cottage and Small Industry Development Bank (NCSIDB) disbursed Nu 1.295bn as loans since its inception in February last year and has adequate funds to operate, said Finance Minister Namgay Tshering during the National Assembly Session yesterday.

 The minister was responding to the question raised by the Jomotshangkha-Martshalla Member of Parliament (MP), Norbu Wangzom.

 The MP questioned the finance minister that despite the establishment of the CSI bank, it has been difficult to avail loans and perceived that there are not enough funds to lend loans and asked on the government’s policies and strategies to overcome the challenges. 

Additionally, she also questioned the government’s Nu 5bn fund as Economic Stimulus Plan in 2013.

 Finance Minister Namgay Tshering said the government injected Nu 5bn as an Economic Stimulus Plan from foreign aid when the 11th Five Year Plan was started in 2013.

 He added from the total of Nu 5bn, Nu 2.1bn was allocated as subordinate debt to the banks and the government still receives interest from the banks.  

Additionally, Lyonpo said Nu 1.9bn was allocated to the then Bhutan Opportunity and Information Centre (BOiC), which was discontinued due to legality issues raised by the Opposition and National Council. The government then decided to close it down.

Lyonpo said the Rural Enterprise Development Corporation Ltd (REDCL) was set up to carry out micro-lending activities for non-formal economic activities in the rural areas with Nu 400mn as revolving fund-II (RF-II).

From REDCL, one could lend up to Nu 0.5mn as loan.  

Additionally, the minister said Nu 1.5bn worth revolving fund-I (RF-I) was injected into the Bhutan Development Bank Limited to finance cottage and small industries through a special window. 

Lyonpo said the government upgraded the REDCL to NCSIDB as a full-fledged non-deposit taking bank in February last year. Moreover, he said RF-I has 30% of non-performing loans. 

When the NCSIDB was started in 2020, Lyonpo said, the government injected Nu 712mn and in a year, the government disbursed loans amounting to Nu 875mn. However, he said the then BOiC and REDCL could disburse only Nu 300mn in three years. 

Lyonpo said the NCSIDB has disbursed Nu 1.295bn as loans to various sectors within 16 months of operation.  

He added that Nu 500mn was disbursed for agriculture related sector, Nu 461mn for livestock related sector, Nu 200mn for manufacturing and production, Nu 98mn for service related and Nu 33mn for business continuity and sustainability.  

Lyonpo also said the government has earmarked a budget of Nu 700mn to NCSIDB and has adequate funds for financing cottage and small industries. 

Further, the MP from Khar-Yurung constituency in Pemagatshel, Tshering Chhoden quizzed the minister that women availing loans from the NCSIDB for textile initiatives have not been received well by the bank.  

She said for textile initiatives they could only get a loan amount up to Nu 50,000 compared to agriculture and others, and that it was unfair and about inequality.

The Lyonpo said there are 339 applicants in textiles initiatives and the government has disbursed Nu 53mn. Additionally, he said the potential of the opportunity to export and loan repayment are also looked into while disbursing loans. 

Thukten Zangpo from Thimphu