The subsidy loan is to pay rents and ensure the livelihood of people working in the entertainment centers
With the entertainment centers having remained shut for more than 15 months since the first lockdown last year, the National CSI Developing Bank is now providing entertainment loan to the entertainment outlets in the country.
The Chief Executive Officer of the National CSI Developing Bank, Kinzang said that the bank is providing subsidy loan to entertainment centers for bridging the operational expenses gap created due to the impact of the Covid-19 pandemic.
He said that the finance ministry has allocated Nu 300mn to the bank especially for these funding purposes.
“The loan was initiated only to entertainment centers due to those centers remaining completely shut as on date unlike other business centers being partially opened,” he said.
According to the CEO, the interest rate is 5% per annum and an individual can avail up to Nu 1.5mn. However, it’s a bank’s discretion to grant the amount depending on the location and the credibility of the business. The gestation period is for six months and is extendable to a maximum of one year. The maximum loan term will be for five years including one year.
The collateral requirement is a trade/business license, copyright© – for movies only, loan care Life insurance (QNLP-II) and securitize assets currently owned by the business.
Further, an entertainment outlet must have a valid business license valid until 10th April 2020 and thereafter to qualify for availing the loan. He/she must have retained the establishment till the date of loan application either on credit or rent payment through self-financing. The business should have been established and must be running in full swing prior to the pandemic.
However, individuals just holding a license to start the business at good times will not be eligible for the loan.
Other required documents include Clean CIR of the proponent, their spouse, and the guarantor prior to March 2020 must have physical business establishments, evidence of pending utility bills, and valid tenancy agreement between the entertainment center and the landlord.
The loan is also limited to only one loan for one owner with multiple licenses in various locations.
The bank will not fund lessees if in case the business is operated on a leased license.
Further, any subsidies/grants/support availed or received from the government during the pandemic will not form part of the loan and if business inventories/equipment are not already mortgaged with other banks.
Entertainment centers such as karaokes, drayangs, discotheques, and movie producers are eligible for the loan. However, those into series, documentaries, and short movies are not applicable for the loan.
The bank, meanwhile, has started accepting applications from those in the entertainment outlets since July 20 this year.
The president of the Druk Drayang Association (DDA), Kelzang Phuntsho said that this has come as a little relief to the entertainment outlets in the country.
He said that it will help the entertainment outlets in paying rents to the house owners and help the livelihood of those in the entertainment sector.
He said that though initially, the bank had decided to deposit the loan amount to the house owner’s account, they have requested the bank to deposit it in the account of the owner of the entertainment center.
“Depositing directly to the accounts of house owners is directly helping the house owners, not the entertainment outlets,” he said, adding that the bank has accepted their request to deposit the loan amount in their accounts.
According to Kelzang Phuntsho, some of the entertainment outlets have closed due to the pandemic, a few of them have still not paid rents and a few of them are paying rents without any businesses.
He said the loan will be discontinued once the business is open.
Meanwhile, there are around 60 drayangs in the country with around 900 employees, of which 90% of them are female. It has been more than a year since they have been closed due to the pandemic.
Dechen Dolkar from Thimphu