Business owners in the country are requesting for further deferment of their loans saying that they have yet to bounce back from the downturn the COVID-19 pandemic caused. These concerns were shared during the recent Bhutan Chamber of Commerce and Industry, BCCI’s consultation meetings in ten districts.
In a similar consultation meeting held in Thimphu, yesterday, business owners voiced their concerns regarding loan repayments.
“If the loan is deferred, it is going to benefit our businesses. But, even if all the amount cannot be deferred, they can defer the principal amount and we can pay the interest, which is not a lot. I think this is better than just deferring the whole amount and later having to pay all at once, which would be too hefty for us,” said Phuntsho Wangdi, the executive director of Singye Group of Companies.
While the majority of business owners supported the deferment idea, some also questioned if it is really necessary.
In response, BCCI President Tandy Wangchuk said the deferment is important as many businesses would suffer if the deferment is not approved.
“Some of the business owners said that the loan deferment might not help much. But we have our interpretations. When we listen to what the businesses have to say in all the districts, it is obvious that the deferment will be beneficial. This is because if we are not able to pay the EMI for more than 91 days, the businesses will face legal actions and the banks will take us to the court.”
He added that though most businesses cannot pay their monthly instalments as of now, there are a few who can and are willing to pay.
However, he said that for the benefit of the business sector at large, the BCCI will propose to the government for further deferment of loans.
“If we keep deferring loans, the banks will go bankrupt. So, to sustain both the banks and the businesses, we came up with a solution. If the loan is deferred, people can pay their EMI as usual can do so but the government has to give them incentives. For example, the incentive can be a one or two per cent reduction in interest rate, which could benefit the business sector a lot. So, the solution is to provide incentives to those who can pay their EMI.
The president said that the BCCI will request a deferment of another two to three years as one-year deferments are too short a time for them to bounce back from the current financial challenges.
The BCCI president said that the loan deferment proposal and other issues raised by the business community will be taken up with the government in the first week of May.
The RMA deferred the loan repayments of moderate and high-risk sectors twice since June 2022.
Karma Samten Wangda
Edited by Kipchu
