Access to finance was for long cited as the main reason for stunting the development of small and cottage industries. Besides bureaucratic hurdle, aspiring entrepreneurs lamented about the challenges of accessing finance and the collaterals required.
To support entrepreneurship in the country and to show that a business proposal was enough to avail of funds for a start up, the Royal Monetary Authority launched the priority sector-lending scheme.
But the scheme, which was touted to revolutionise the economy has received lukewarm response from most dzongkhags. The Cabinet order has already empowered dzongkhag committees to assess and approve proposals. The central bank is creating awareness across the country and financial institutions have been informed about the scheme.
Save for Gasa and Chukha dzongkhags, which have already formed PSL committees, the rest appear to be not yet on board. The dzongdags, who chair the committee, should be at the forefront to implement the scheme and spur entrepreneurship in their dzongkhags. This is,however, not happening. What we see is the priority sector scheme not being prioritised, indicating, yet again, a rift between the central and local governments.
This calls for accountability and proper monitoring. The central bank, which is gathering feedback even as it is implementing the scheme, has to follow up with dzongkhag administrations on the progress and challenges. It must not be complacent and say that it has done its share. The scheme’s success to boost entrepreneurship from the grassroots hinges on collective implementation. Drawing boundaries do not help any institution, let alone the aspiring entrepreneurs.
While the central bank awaits updates on the scheme’s progress in the dzongkhags, it forgot to include the thromdes. The authority has acknowledged this oversight and is working on forming a committee at the thromde level to vet business proposals. We hear that queries to relevant authorities that are responsible for small and cottage industries to address this oversight went unheard. But with thromdes being developed as a hub for all sectors, it is unexpected to see the towns being left out of a national programme.
The scheme supports entrepreneurship at the grassroots, in the agriculture sector and for this reason, it must not lose steam. The central bank and gross national happiness commission could explore including this scheme’s implementation in the annual performance agreements. Similar agreements could also be drawn with the financial institutions. Incentivising banks to become a part of a national effort may help only so much.
The central bank must also look into minimising red tape in this scheme. Proponents are already expecting the process to be long and arduous since those involved in assessing the proposals are all from the bureaucracy. To what extent efforts to change this perception are being done is yet to be seen. If the dzongkhag administrations are not responsive to the scheme, the central bank should explore for alternatives to open a window to directly facilitate proposals from the dzongkhags.
A business idea from any part of the country should not be lost because of unenthusiastic dzongkhag administrators.