Major economic boost expected for agriculture and non-agricultural Cottage and Small Industry (CSI) sectors in the country from next year as financial institutions will grant loans at a preferential rate under Priority Sector Lending (PSL). The Royal Monetary Authority (RMA) launched the ‘Priority Sector Lending Guidelines’ in Thimphu, yesterday.
This financial guideline is an integrated platform that coordinates interventions of several government agencies to stimulate CSI sectors as an important component of Bhutan’s economic transformation through improve access to finance. The Central Bank in consultation with the Finance Ministry and financial institutions came up with the preferential rate (Its ceiling for Primary Production under Agricultural CSI is 8 per cent while for non-agricultural CSI & value addition in Agricultural CSI, it is 8.5 per cent).
Prime Minister Dasho Tshering Tobgay, who was present at the launch of Priority Sector Lending Guidelines said, Priority Sector Lending will transform the country’s entire economy. “In fact it’s going to revolutionised the whole economy of Bhutan,” added the Lyonchhen.
He further said to improve the economy; the government has identified five key components. Of that, two will be achieved under PSL.
“That is agriculture and small industries. Actually the government is trying to improve all the components but due to shortage of funds, we are not able to bring qualitative improvement in all.”
For primary production under agriculture sector, an individual can get loan of Nu 500,000, and for groups or cooperatives and incorporated companies, they are eligible to get loan of Nu 10m.
RMA approved the PSL guidelines during the board meeting in June this year. The guidelines is the result of His Majesty’s Royal Address during the 109th National Day celebration in Trongsa last year.
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