Bank of Bhutan (BoB) and Bhutan National Bank (BNB) disbursed their first loans under the Priority Sector Lending (PSL) scheme earlier this week.
BoB disbursed a loan amount of Nu 846,000 to Ambika Devi Lamichhaney from Begana, Thimphu for shiitake mushroom production. Similarly, BNB also loaned out Nu 500,000 to Kinley Gyeltshen from Bjena gewog in Wangduephodrang for commercial potato production.
They are the first clients to avail the loan from the respective banks.
Interested applicants have to first approach the gewog centers of their respective dzongkhags where the business is to be established.
After that, the applications will be reviewed by the dzongkhag PSL committee and once the committee approves it, the application will be forwarded to the respective financial institutions for appraisal.
Thirty four year old Ambika Devi Lamichhaney said that she wants to start her mushroom business small scale in the domestic market and slowly export abroad.
“I feel that growing shiitake mushroom is sustainable compared to other agricultural produce because it fetches good money, around Nu 800 a kg,” she said.
She has already undergone trainings on mushroom cultivation and plans to start business as soon as possible because after March she cannot cut logs required for mushroom production from the forest as per her community rule.
Ambika Devi Lamichhaney availed the loan at an interest rate of 8.5% for 10 years.
Meanwhile, Kinley Gyeltshen, 25, said the climate in his village is best suited for potatoes. He wants to produce potato on a large scale and export to India.
He has already completed potato cultivation on eight acres of land.
BNB’s loan repayment period for him is one year at an interest rate of 8%.
According to BoB bank officials, so far the bank has received another three proposals through the dzongkhag PSL committee: two for poultry and one for a dairy product from Gasa, Thimphu and Gedu respectively.
A bank official from BNB said they have received three proposals as well and around 20 enquiries about the scheme from individuals.
PSL is the outcome of His Majesty the Druk Gyalpo’s vision as articulated during His Majesty’s National Day Address in Trongsa in December 2016. Inspired by the Royal Aspiration, PSL came into effect from January 2018.
The Royal Monetary Authority in collaboration with financial institutions launched the scheme to help young entrepreneurs and farmers have improved access to finance to bring about positive impact in the society and enhance livelihoods.
Further, Cottage and Small Industries (CSI) sector is being explored as a priority sector for targeted lending under the PSL scheme. The CSI sector is divided into agricultural CSI and non-agricultural CSI activities. A value-chain approach to financing is adopted especially for agricultural CSI by covering primary production (defined as agriculture proper, livestock and forestry activities) as well as other linked activities that add value to primary products through processing, packaging, marketing and sales.
Any individual, group or incorporated companies can avail PSL loan to a maximum of Nu 10mn for new projects as well as for business expansion at a preferential interest rate of 8% per annum for Agricultural CSI (primary production) and 8.5% per annum for Non-agricultural CSI and value-chain financing in Agricultural CSI.
Dechen Dolkar from Thimphu