Having a loan application denied can be a big disappointment for anyone, especially in times of emergency. Unlike regular teachers, contract teachers across the country have been dealing with such disappointments for a long time. The banking institution’s loan eligibility criterion of borrowers requiring to have a Provident Fund or Gratuity has made it impossible for contract teachers to avail themselves of personal or consumer loans from banks in the country.
For a bank to lend money, an applicant should be entitled to Provident Fund or Gratuity. And this very criterion has turned down many loan applications from contract teachers.
According to the Bhutan Civil Service Rules and Regulations 2018, contract teachers are not entitled to Provident Fund. A Provident fund is an investment fund that employers and employees establish to serve as long-term savings to support an employee’s retirement.
Contract teachers say they are helpless and disappointed.
“We went through all the information from the website they have stated that to avail consumer loan for the contract employees we need to have a contract extension, order and all, but when we have all the documents, they directly point out that our PF is not being cut. So, what they have stated on the website and what they point out in the bank is contradicting,” said a contract teacher.
“We would be grateful if there is a provision to deduct PF from our salary as soon as we join the service. This would not only help us in the future but also help us get loans easily. It is very hard to survive only on a monthly salary now,” said another contract teacher.
“Expenses are increasing these days. So, the loan will be an alternative to support contract employees like us. We would be grateful if contract employees like us can get loans like any other employees,” said a contract teacher.
According to various banks, contract employees can avail themselves of loans for up to a maximum period of five years depending on certain factors such as employment tenure, reliability of the source of income and credit history among others.
“Some of the contract employees may have found it difficult because the contract may not be final and binding on the employer especially private sector contract employees’ contract may get terminated mid-way and if that happens, our surety of recovering the loan disappears with that,” said Hem Kumar Acharya, the Director of Banking Operations of the BNBL.
For now, only salaried employees with a provident fund (PF) or gratuity can take loans. BBS asked the Education Ministry on if there are any plans to start provident funds or gratuity for contract teachers. They said there are no plans as of now. There are more than 1,500 contract teachers in the country today.
Edited by Passang Dorji