English | Dzongkha Friday, May 29, 2020

Crowdfunding gains momentum

Oct 16, 2019

Bhutan crowdfunding is gaining momentum in the country. Since the launch of Bhutan Crowdfunding Portal in July this year, the office has received 7 applications and over 15 start-ups wanting to raise funds through the platform.

Bhutan Crowdfunding is the first digital platform developed by the Royal Securities Exchange of Bhutan (RSEB) licensed under the crowdfunding regulations issued by the Royal Monetary Authority (RMA).

The RSEB says that since they have successfully completed two campaigns, it has generated a lot of interest in our young entrepreneurs and the office is receiving more number of application for the crowdfunding platform.

The office had received applications from food processing business, Service industry, manufacturing, recycling and even day-care centre interested to register on the platform.

“In terms of benefit, now that the entrepreneurs will be responsible to the shareholders and accountable as well. So there is a certain sense of professionalism developed. So naturally when you are accountable, you have to perform well and it doesn’t end in crowdfunding. Now for future expansion, there is series of methods they can raise funds and ultimately we want these companies who come for crowdfunding to raise funds through Initial Public Offering (IPO) and get listed on the exchange,” Dorji Phuntsho, the Chief Executive Officer of RSEB, said.

Another advantage of crowdfunding is that the investor does not have to bear much financial implication if the company doesn’t do well as RSEB has set a limit for investment.

Unlike other countries, here we are emphasizing that the business has to have a prototype, which means it has to be more than a start-up or more than at the idea stage. So they should have a proven record in the form of a prototype. If it is a service, they should be in the business for some time because it’s not fair for the investors if it is not a prototype,” the RSEB’s CEO added.

The current financial status of the business is also checked and the feasibility of the business plan is validated as well.

Earlier, Himalayan Food successfully raised Nu. 4.5 M through Crowdfunding. It is the second enterprise to do so after Bhutan Alternatives.

“It is actually our college business idea. During our college days, we have seen many Bhutanese farmers not having a proper market, having a difficult time selling their produce in the market, so at that time we thought that can we make something out of those products,” Bikash Gurung, the Co-founder of the Himalayan Food, said.

Meanwhile, the RSEB is focusing on the framework for the social crowdfunding platform and is looking for social entrepreneurs to come forward as well.

Sangay Dorji

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