The bank loans for the 31 taxi drivers wanting to procure electric vehicles under the EV project have finally been approved. Their loans had been rejected earlier due to high non-performing loans resulting from loan non-payment by the previous EV purchasers. The issue was resolved after the Bhutan Taxi Association cleared a portion of the due amount and brought down the NPL.
The loans for the 31 cabbies have been approved after the Taxi Association paid Nu 517,000 to the Bank of Bhutan. This brought down the bank’s NPL from 4.4 to 2.4 per cent. The taxi drivers, most of whom already sold their old taxis, were unable to take ownership of the EVs without the loans. The BoB is the authorized bank to provide loans under the government’s Electric Vehicle project and had set the NPL threshold at three per cent.
According to the Bhutan Taxi Association, the money was paid from the association funds.
“We paid the unpaid amount of five drivers. That reduced the NPL threshold to two and like before, the loans will be granted to them,” said Rinzin Chophel, the chairperson of the Bhutan Taxi Association. He added that the five taxi drivers who failed to pay their loan deposits resulting in the loans becoming non-performing will have to pay back their dues to the association within a month. And failure to do so will result in the seizure of their EVs. This, the association said, is as per the terms of an agreement signed between them and the five individuals.
To avoid similar problems in future, an amended memorandum of understanding was also signed between the association, the BoB and the EV project today.
As per the new MoU, an EV owner will be issued a reminder when their loan payments exceed one month and the EV seized if it exceeds two months. The vehicle will then be given to another applicant. This they said will avoid or keep the NPL below the threshold.
With this, there will be 261 electric vehicles that replace fossil fuel cabs in the country.
The Electric Vehicle Project said the remaining 39 EVs will also be brought in soon.
The Bank of Bhutan were not available for comment.
The government started the EV project in 2018 aiming to replace 300 fossil fuel cabs with EVs and promised to provide taxi drivers with a 20 per cent subsidy along with a 70 per cent collateral-free bank loan.
Chenga Dawa
Edited by Yeshi Gyaltshen
