In a strategic move to uplift rural communities and foster economic growth, the Bhutan Development Bank (BDB) has announced the launch of the “Medhey Gongphel Kuendrel” Community Development Loan under its Micro Lending Program. This initiative is in line with the bank’s commitment to empower and support rural populations in Bhutan.
The Micro Lending Program comprises two key approaches, this includes wholesale lending, where Micro Finance Institutions can apply for subsidized funds for onward lending to micro-borrowers, and retail lending, where the BDB directly provides micro loans to rural communities.
The BDB’s board has approved a substantial sum of Nu.1,000 million for the next five years, with 25% allocated for wholesale lending and 75% for retail lending. This commitment is aimed at jumpstarting the program, and the board is ready to approve additional funds based on progress and demand.
Under the retail lending arm, the “Medhey Gongphel Kuendrel” Community Development Loan is introduced to meet the diverse needs of rural communities engaged in agricultural, livestock, forestry, and home-based production activities. Notably, this loan eliminates the need for collateral, providing a unique opportunity for individuals with dreams but limited means.
The Community Development Loan is designed to be a beacon of emotional and financial support, transcending traditional lending norms. Target customers include rural farmers involved in income-generating activities, with a maximum loan ceiling of Nu.500,000 and an interest rate of 15% per annum.
To ensure responsible lending, applicants must be above 18 years old, Bhutanese citizens, and engaged in eligible activities. Students, monks, salaried individuals, and those with a history of default in the last six months are not eligible.
This initiative aligns with the International Day to End Violence Against Women (IDEVAW) theme, “Invest to prevent violence against women and girls.” Given that 42% of borrowers are female, the program represents a significant step toward the economic empowerment of women in rural communities.
The Community Development Loan will be available from January 2024. Interested individuals can visit the nearest BDB branch or the official website (www.bdb.bt) for more information on the loan and document requirements.
The BDB emphasizes its commitment to delivering the needs of rural communities and seeks support from various government agencies, including local governments, to ensure the success of this initiative. The launch marks a milestone for the Bhutan Development Bank, reinforcing its dedication to fostering economic development in rural areas.
By Kinley Yonten
