The Royal Monetary Authority (RMA) is reviewing the benefits and challenges of its Priority Sector Lending (PLS) scheme. The officials from the Central Bank visited its assisted projects in Tsirang yesterday.
From the 90 projects in the dzongkhag PSL committee approved, financial institutions accepted only 12. Over Nu 10 M was released for the projects.
Most proposals were rejected because of the applicants’ bad Credit Information Bureau record and existing loans with the banks.
Apart from visiting the project sites, the team also met with the dzongkhag’s PSL committee.
“For quite a few of the banks, the authority to approve the loans still rests with headquarters, and they have their reasons for it. But I think we do need to bridge that gap as well,” Yangchen Tshogyel, the Deputy Governor of RMA, said.
“Because I think if you are in the headquarters you are not fully aware of the level of support that the dzongkhag has. So this is one issue that we will consult with both the financial institutions as well as the dzongkhag to see how we can bridge this gap.”
The team acknowledged the efforts put in by the sector heads for regularly monitoring and supporting the PSL projects. The team visited 11 districts so far.
As of June this year, over 500 projects were approved under the PSL scheme across the country. Most proposals were related to livestock and vegetable farming.
Tsirang, after Thimphu, has the highest number of applicants for the scheme.
The RMA introduced Priority Sector Lending in December last year to promote and identify cottage and small industries.
