Press Release for the Launch of Community Development Loan under the Micro lending programme.

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• Press Release for the Launch of Community Development Loan under the Micro lending programme.

In-line with our mandate to empower and support rural communities, the Bhutan Development Bank (BDB) has initiated a micro lending programme through two approaches:

1. Whole sale lending: Interested Micro Finance Institutions can apply for subsidized fund to BDB for on-ward lending to their micro borrowers.
2. Retail lending: The BDB will directly provide micro loans to rural communities.

The board of the BDB has approved a sum of Nu.1,000 million (Ngultrum One thousand million) for next 5 years, of which 25% will be allotted for whole-sale lending and 75 % for retail lending, to start the programme. Depending on the progress and demand, the board has also committed to approve additional fund to support the programme if required.

Under the retail lending, the BDB is pleased to launch the “Medhey Gongphel Kuendrel” Community Development Loan to cater the needs of rural communities engaged in various agricultural, livestock, forestry, and home-based production activities without the burden of collateral. The Community Development Loan transcends the traditional lending norms, aiming to be a beacon of emotional and financial support for those in rural communities who have dreams but lack the means. It’s a testament to the belief that every individual, irrespective of their circumstances, deserves an opportunity to thrive.

The target customers are rural farmers pursuing an income generating activities under agricultural, livestock, forestry or home-based activities. As the loan is collateral free, the interest rate has been set at 15% p.a and the maximum loan ceiling at Nu.500,000 (Ngultrum Five Hundred Thousand Only). To ensure the loan is utilized for intended purpose, the eligibility criteria require the applicant to be above 18 years of age and a citizen of Bhutan. Student, monk, or salaried individual, and customers with history of default in last 6 months, are not eligible. The financing of the loan will be based on viability of the micro loan projects submitted by the applicant. The Loan will be available with effect from January 2024.

The launch of this Community Development Loan marks a significant milestone for Bhutan Development Bank and reinforces our commitment to fostering economic growth in rural communities. We believe that by providing accessible and tailored financial solutions, we can unlock the potential of countless rural entrepreneurs and contribute to the overall development of the Country.

The launch also coincides with the observation of the International Day to End Violence Against Women (IDEVAW) with the theme “Invest to prevent violence against women and girls.” Given the fact that 42 percent of our borrowers are females, the program marks a significant endeavor towards contributing to the economic empowerment of women in the rural communities.

Customers wishing to availing the services may visit any of our nearest branch or visit our website www.bdb.bt to learn more about the loan and document requirements. To make this successful, the BDB is prepared and committed to deliver to the needs of the rural communities. Given the challenges and limitations to meet this goal, the BDB would also like to solicit support of various government agencies including the local government.