Upcoming entrepreneurs, who come up with business ideas, are facing challenges in availing loans from the financial institutions. This is mainly due to requirement of collateral to avail loans. As a result, entrepreneurs said without the required money, it is difficult to establish a business even if they have brilliant business ideas.
Thirty-year-old Ugyen Wangchuk from Lhuentse is one of the entrepreneurs, who recently started producing homemade soaps and phenols, using lemon grass and resin. He said the financial institutions refused to finance his project, as he does not own any land or building as collateral. Loden Foundation later came to his rescue by granting him Nu 600,000 without any interest.
“I thank the Loden foundation for the success of my business. Because of their financial support my business is able to reach to current stage and I am going to get their help to expand my business in future,” said Ugyen Wangchuk who runs Mountain Mist Manufacturing Unit based in Thimphu.
Other entrepreneurs, who are now doing well, had to go through similar problems initially.
“Youth are very much interested in taking up business. They choose it as a career but availing loan is difficult for them and they lose interest in it,” said Sonam Tshering, proprietor of Pelbar Homemade Soap.
Tshering Deki, the owner of Buckhweat Noodle said, “The main challenge we face at the initial stage is finance and mentors. They give us the loan but without mentor some can’t put their business ideas in to reality.”
Some others also shared that promoting and pricing of the product is another challenge.
“We are not able to advertise our products as we would want to. My product is completely new and People are having very difficult time getting used to the new product and they are not very keen on trying new products,” said Sonam Chokie, Bhutan Herbal Tea.
Loden Foundation is the only civil society organisation that provides interest free loans to the entrepreneurs. The Foundation also provides entrepreneurship programs such as training to the aspiring entrepreneurs.
“Over the last ten years Loden Foundation has financed 131 projects out of which we have a good number of entrepreneurs with bachelor’s degree as their educational background. A decade ago I think our youth are not ready for self employment. They have always been expecting jobs from the government but that was no longer a case now,” said Dorji Tashi, the Executive Director of Loden Foundation.
He said problems can be eased if stakeholders can come together and revise the requirements and polices of the government and the banks. The establishment of the Rural Enterprise Development Corporation Limited and Priority Sector Lending Policy are some of the major initiatives taken by the government to empower aspiring entrepreneurs in the country.
