Realising there are many business ideas that can build a more resilient economy, it is also a fact that all business ideas do not have collateral support to access financing. So to bring ideas to reality and support the private sector, the government launched The National Credit Guarantee Scheme today.
The National Credit Guarantee Scheme is an intervention under which the government guarantees a portion of the loans availed to establish a viable business entity. According to the Finance Minister, the private sector is an important partner for economic growth and therefore it is important to enhance access to financing by easing access to credit.
“We have been commanded that we should not be afraid of taking new steps due to the risks associated with it. We should rather come forward and take steps that could help promote private sectors. We are in a situation where we need to assure unconditional support for private sector development. The scheme is not just for small and cottage industries, but it is for all business entities,” said Namgay Tshering, the Finance Minister.
The scheme is also a policy measure under the COVID-19 situation to secure financing for establishing a business. It will also support the up-gradation of existing businesses.
However, the Governor said people should not be irresponsible with the kind of features the scheme has.
“Some blessings could turn into a curse. We may regard this as a blessing from the government to the small entrepreneurs, CSI, agriculture and even the medium at large. But what happens if the borrowers and lenders are not responsible enough. Then we will land up fighting a crisis behind this scheme,” said Dasho Penjore, the Governor of the Royal Monetary Authority.
The scheme will be implemented in partnership with the state-owned Banks; Bank of Bhutan, Bhutan Development Bank, and the National CSI Development Bank.
While the National Credit Guarantee Scheme will cater to all categories of industries, the projects under the scheme will focus on boosting exports, promote import substitution, promote innovation and technology and creation of employment.
The government will provide guarantee coverage of up to Nu 30 M under this scheme.
Kinley Dem
