Even today, Bhutan does not have a legal framework to govern Community Based Organizations (CBOs). A CBO is an organisation operating at the grassroots level to promote the wellbeing of the members of the community.

The legal framework would not only monitor cooperative legislation in the country, but will provide a constructive assessment and recommendations to improve the recognition and support given to cooperatives. 

Rooted in Buddhist values, the non-Government Organizations or volunteerism in Bhutanese society today is governed by traditional belief systems, and not within a legal framework.

In addition, with development, Civil Society Organizations, cooperatives and CBOs have multiplied in Bhutan. 

While CBOs play a vital role in community development and contribute towards achieving national goal of self-reliance and Sustainable Development Goals, however, CBOs in Bhutan are handicapped with no proper laws to function. With fear of possible legal complications, some CBOs had closed shop. 

One such organization is the Chuzagang Saving Group (CSG), a CBO under Chuzagang gewog, Sarpang set up in 2004. 

This CBO focused on financial elements in the community, like lending and savings and the sole objective of establishing this group was to improve the livelihood of communities through scaling to commercial farming. It was operated from homes with no proper office. 

Over time the local administration managed to facilitate the welfare of people. The agriculture extension office trained the people of nine chiwogs of Chuzagang. Villagers were also encouraged to form agriculture cooperative to help uplift their lives.

Inspired by the move, about 50 villagers attended the training of which 13 members decided to form a Savings Group. Initially, there were six male and five female members. The members deposited Nu 50 as monthly member fees for three months and later raised it to Nu 100 to broaden the scope. 

It was reviewed in 2009 and the members sought registration from the concern agency to operate with legal rights. However, registration was not granted.  

After setting up the Chuzagang Savings Group, the group provided loans to the villagers with the highest ceiling of Nu 1,000 per individual. The interest rate was at par with the Bhutan Development Bank Limited (BDBL). 

The chairperson of CSG, Yangzom said that the status of the CSG is in a limbo today. She stated that the group could not continue its operation due to certification issues, adding that it also lacked educated human resource.  

“If there were strong and educated members, the group would have succeeded,” she said, adding that there were no proper book keeping and no proper management system nor did the relevant agencies rendered any support to the group. 

There was a misunderstanding among the members that about Nu 0.6 million was defaulted according to the information from non-members. Few years back, the members shared about Nu 15,000 each and there is still controversy on sharing the remaining amount.  

In addition, few people who had borrowed money from the group have still not paid back. 

In initial state of resettlement, the secretary of the group, Nima said that the loans had benefited the villagers.  “Loans from CSG benefited the members and others as well to buy stationeries and school uniforms and to pay school fees,” he added.  

To further their scope of business, the group approached the gewog office to obtain the licence after drawing a Standard Operating Procedures (SOP). But the group was instructed to operate with internal service rule until the legal permission was granted which never happened. 

The former chairperson of the group, Ap Sangay said that upon members lacking literacy, the saving group did not get any appropriate support. He too pointed out that the group lacked coordination and members were discouraged to work. 

Another group member Nima Dorji said that after change of chairperson, the monthly collections were discontinued. Moreover, the clients did not pay the loan even after the maturity date. 

Later, the group with the assistance from the ministry of agriculture and forests procured rice and maize pounding machines. The members hired the operator and provided the service to the villagers at minimal rate. 

However, with dwindling financial returns the group could not pay salary to the operators. The milling machines set up for agriculture improvement infrastructure are kept idle at Shawapong since the start of pandemic. 

Meanwhile, the agriculture extension officer of Chuzagang gewog, Tashi Dawa said that gewog officials, particularly from the agriculture sector pushed and provided necessary help. He said that the group was asked to show records and allow auditing. 

However, the agriculture extension officer pointed out that no one was found accountable and responsible. “The flaw in the management must have led to failure of functioning of the CSG,” he added. 

Chuzang gup Karma Tshering said that the group is in a dilemma today. However, he said that being newly elected Local Governance (LG) leader, he does not have much understanding about the group and need to study further and see if the gewog can intervene. 

The tshogpa of Nimaling-Shawapong chiwog, Nima Dorji said that the present LG leaders did not get any written or verbal complaint from any of the CSG members. 

Some members from the group had filed a case against the management on misuse of funds in the gewog office. However, the gewog administration dismissed the case after finding it had no grounds.  

As of today, Bhutan does not have specific laws for CBOs which has stifled its growth. 

Though the Royal Monetary Authority approved the private money lending rules and regulation in 2017, there is need for separate rules for CBOs for a local level in small amount.

Until then grass root organizations like the Chuzergang Savings Group will have to struggle for an identity.  

This story is published with support from Bhutan Media Foundation (BMF)

Contributor: Sangay Rabten

Position: Senior Reporter

Media Outlet: Business Bhutan, Financial Newspaper

Article Type: Community Based Organization (CBO) Story

Year: 2022

Recognition: Selected as the Best CBO Story of the Year

Sangay Rabten’s article has been recognized as the Best CBO Story of the Year for 2022. This achievement underscores Rabten’s exceptional storytelling skills and the depth of research and analysis evident in the article.