The government is working on initiating internet facilities for those availing support with their proposal from the Priority Sector Lending (PSL) scheme.
This is believed will enhance or fast track processing of the project proposals.
During the question and answer session of the National Assembly on Friday, Member of Parliament (MP) from Khar-Yurung constituency Tshering Chhoden said although the PSL was established to help the rural people, firstly, the plan of activities has to route through Dzongkhag Tshogdu (DT), which is time consuming.
She said that secondly, even if DT approves the budget, there are challenges of not getting the loan and not being able to avail loan on time.
The MP asked what are the plans and strategies to solve these challenges and make availing loans more convenient than today.
In response to the question, Finance Minister Namgay Tshering said that the government is working towards improving mutual trust between the DT and financial institutions to reduce the turnaround time from the day one till the clients get money in hand.
The Lyonpo said that if the DT committee approves the project proposal, banks should not reject the proposal without reviewing it properly.
“The government is also working on reducing the loan availing process through internet facilities,” Lyonpo said, adding that the government will ensure that if the project proposal was taking one month for approval before, now it will take five to six days only.
The Lyonpo mentioned that since there are three committees for reviewing project proposal of the PSL which may led to delay in the project proposal and if DT committee approves, there are cases where financial institutions reject the proposal.
Lyonpo said that for the PSL proposals, there are challenges since they are collateral free loans and who will repay the loan if it gets defaulted. “I feel that there is a requirement of proper procedure for this,” the Lyonpo said.
Lyonpo Namgay Tshering said that currently in the PSL, all the clients have to insure their projects and it is good idea that it should be insured. If in case if clients cannot repay the loan, the insurance premium will take care of it.
Lyonpo acknowledged that so far PSL has been running successfully, monitored by the Royal Monetary Authority (RMA).
According to the RMA third quarter report 2019 of PSL, financial institutions collectively received 1,064 projects as of September 2019, out of which 480 projects were financed.
Similarly, dzongkhags received 1,558 PSL applications, out of which 1,275 projects were approved (which is around 80%).
The Finance Minister also informed that the government will be establishing a Cottage and Small Industries (CSI) bank within the next two weeks and establish its branches in all the 205 gewogs.
Dechen Dolkar from Thimphu