To enable rural communities in the country to progress out of poverty with increased income growth, Her Majesty the Queen Mother Dorji Wangmo Wangchuck launched Tarayana MicroFinance (TMF) for Rural Development today.
TMF is licensed under the Royal Monetary Authority as a microfinance institute. The launch commemorates the 40th Birth Anniversary of His Majesty The King.
The programmes under the TMF include skills development and personalised repayment terms to facilitate access to finance. Addressing the gathering, Her Majesty the Queen Mother Dorji Wangmo Wangchuck said the initiative will contribute towards fulfilling His Majesty’s vision of financial inclusion for growth and development so that all citizens live productively and with dignity.
“When looking into the financial access of rural communities, we found that many did not seek loans from formal service providers. They often borrowed from informal money lenders who charged exorbitant interest rates. Moreover, most were hesitant where formal bank loans were concerned. I remember there were much contemplation and deliberation on the pros and cons of starting a formal MicroFinance facility within Tarayana on the one hand and the growing demand from the rural communities on the other. The Tarayana Board finally decided to go ahead with this initiative on one condition that thorough groundwork was to be undertaken first and done professionally. Special attention was also to be taken to ensure that this was a development financing mechanism,” Her Majesty the Queen Mother Dorji Wangmo Wangchuck.
The initiative will provide two micro loans without any collateral at an interest rate of 15 %. With that, the beneficiaries can either extend their already small businesses with small loans or start a new income generating activity with larger loans. The microfinance initiative will not disburse cash. Instead, the field officers will give out the amount in kind by delivering the materials and equipment required for the income generating activities.
“Tarayana Micro Finance initiative is especially for rural communities. We hope and aspire to provide access to micro credit especially to the rural communities. So not just the micro-credit we also plan to give the rural communities continuous skills training and also constant monitoring and hand-holding and we also hope and plan to support the small and medium enterprises by connecting the rural communities with the different partners; government and private,” said Tashi Dolma, the Communication and Documentation Officer at Tarayana Foundation.
TMF customers will make use of the B-Ngul financial solution to repay the loans. The B-Ngul financial solution, developed by Bhutan Telecom, enables electronic payments even for those who do not have a bank account or a smartphone.
TMF plans to expand from the three pilot Dzongkhags in Samtse, Tsirang and Zhemgang to all the rural pockets by the end of next year.
Sonam Pem
