Credit access to be addressed through the forthcoming ESP

Credit access to be addressed through the forthcoming ESP

The finance ministry is in dialogue with the central bank with regard to identifying productive sectors for investment to address credit access

In their efforts to enhance the business ecosystem in the country, the government is banking on the Economic Stimulus Plan (ESP) budget to ease access to finance for revamping the country’s economy. According to the Finance Minister, Lekey Dorji, access to credit will be addressed through the forthcoming ESP. The Minister said, “We are also in dialogue with our central bank, the Royal Monetary Authority (RMA), to identify productive sectors to focus our investments on.” In addition, the Minister stated, “We have to prioritize the production of goods and services over trading and consumption. The reduction of the regulatory environment should accompany ESP implementation to achieve the desired objective.” Meanwhile, the latest report on business regulatory processes reviewed by the Ministry of Industry, Commerce, and Employment (MoICE) also recommended easier access to finance for the private sectors.

Dawa Tshering, a retailer based in Thimphu, said, “I understand that the country is still reviving from the pandemic; however, access to finance has been very challenging for us.” In addition, Dawa mentioned that though the government has been very supportive, access to finance from financial institutions has been very challenging. “I would be grateful if the current government would address these challenges by streamlining some of the rules and regulations, making it more convenient for us,” said Dawa.

Similarly, another private entrepreneur said that most aspiring entrepreneurs are stuck with the seed budget for their businesses, though the government and other NGOs offer full support. “However, I feel that it would be much easier for them if the government establishes a dedicated financing mechanism,” said the entrepreneur.

Meanwhile, in response to an executive order issued by the government on January 29, 2024, MoICE has undertaken a comprehensive review of Bhutan’s business regulatory processes. The review involved collaboration between government and private sector stakeholders, ensuring a thorough understanding and identification of practical solutions to the challenges faced by businesses in Bhutan. This initiative aims to streamline the entry and exit procedures for businesses, fostering a more conducive environment for business expansion and development.

The MoICE Minister said, “We have initiated a review of income tax rules on the advice of the Prime Minister, and we will be reviewing all policies, rules, guidelines, standard operating procedures (SOPs) that stand as stumbling blocks for our entrepreneurs.” “My colleagues in other ministries are also in the process of reviewing the same,” the Minister added.

In addition, Finance Minister Lekey Dorji said, “Our experiences with Priority Sector Lending, National Credit Guarantee Scheme, and ESP show that it is not just access to finance that is important for enhancing the business ecosystem, but also the regulatory environment.” The Minister emphasized that firstly, the ministry aims to reduce the regulatory environment to make it more business-friendly and reduce the compliance cost of businesses. “On the first day of assuming the office on 29th January this year, PM issued an executive order to MoICE for a comprehensive review of the business regulatory processes, recognizing this as an important step for the success of entrepreneurs and startups,” the Minister reiterated. The Minister also shared that the Finance Ministry is committed to being the government in the service of the country and the people. “We will make it easy for our people to be entrepreneurs and businesspeople,” the Minister said.

By Sherab Dorji, Thimphu