BoB will provide start-up loans to qualified businesses without collateral

Dechen Dolkar

De-suups, who have participated in the De-suung Skilling Program (DSP), are eligible for start-up loans from the Bank of Bhutan (BoB) without collateral requirements.

This, officials said, would facilitate access to finance for de-suups to start their own businesses in services, production and manufacturing, agriculture and construction.

Launched on May 11, the financial service will be provided if another de-suup eligible for the start-up loan comes forward as collateral. BoB Managing Director Dorji Kadin said access to finance was the biggest hurdle due to collateral requirements. “But this DSP start-up loan does not require collateral and it will allow any eligible and interested business to start a business.”

He said the program aims to help budding young entrepreneurs seek business opportunities and also create job opportunities to address youth unemployment issues and strengthen the economy.

The CSP start-up loan was approved and classified as Priority Sector Lending (PSL).

The loan interest rate is eight percent and the loan ceiling is Nu500,000 for an individual, Nu(M)1 million for a partnership and a maximum of Nu5 million for five companies. or more working together. For cooperatives, it’s Nu 5M.

The term of the loan will depend on the nature of the loan, but the maximum term will be 20 years. For gadget loans, the term is five years.

At the launch, three de-suups signed loan agreements to purchase computers.

“I am forever grateful to Her Majesty for giving me the opportunity to get digital marketing training and skills to support myself,” Karma Norzin said.

She also said she was relieved that BoB offered this loan program and now she can buy a good laptop and start earning an income.

Meanwhile, there are four conditions to qualify for the loan, which require the de-suup to have successfully completed a DSP training program and the DSP financial literacy training program. He or she must have a good credit record and also obtain a letter of recommendation from De-suung’s office.

Director of BoB’s Credit Department, Prem Makthun, said the loans will be provided with amortization, which will be term loans for financing capital investments and without amortization which will be working capital for the operation of a company.

BoB Chairman Karma Yonten said that BoB launched the DSP Start-Up Loan to support qualified de-suups, who were trained under the visionary DSP which was launched on Her Majesty’s Royal Command as a sign of deep appreciation for the exceptional services rendered by de-suups during the pandemic.