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Startups face challenges with policies and non-availability of raw materials

Despite efforts to promote entrepreneurship in the country, government policies and availability of raw materials constrain startups in the country.

A 26-year-old entrepreneur who started his business six months ago said that most of the government policies are aimed at bigger businesses.

“When we suggest about finding investors from abroad, it should come in as Foreign Direct Investments (FDI) which is not feasible for small startups,” he said. “There are some wealthy people willing to support startups, but we do not have a government policy about it.”

He said foreign investors are willing to invest only in private limited companies and that the minimum requirement for a company to become private limited (three years) is too long. “Government says the FDI policy is strict to protect the small cottage industries but without FDI there is no capital and without capital, only the rich can afford to start a business.”

Priority Sector Lending (PSL) Guidelines 2017 launched by the government recently provides loan schemes for the cottage and small industries sector.

He said that although it is a good initiative, it is worrying on how the government would tackle if a borrower is unable to repay the loan. “When they say its collateral free, anyone would take up the loan but how would they tackle the issue, if a borrower is unable to repay it.”

He also suggested sending entrepreneurs instead of government officials for entrepreneurship-based workshops and training abroad. “What we need is international exposure and that is what we lack.”

The entrepreneur said there is a need for all startups to come under one umbrella such as the economic affairs ministry to help timely distribution of information. Currently, the startups are divided according to benefactors such as the banks, Loden Foundation and economic affairs ministry, among others.

He said that budding enterprises need good policies and feasibility. “The government keeps saying they will support entrepreneurs but when it comes to action, it’s difficult even to get an appointment.”

Jigme Singye with the four-month-old business ‘Happy Delivery’ said if people complain, the government makes it illegal. “For example everyone is eligible for a LPG cylinder per month and anyone can take the card and collect the gas on their behalf.”

However, the authorities refused issuing him the gas since October last year saying that a separate licence was needed for delivery of LPG cylinders.

Framing of a guideline for LPG service providers and issuance of a gas delivery license is not helpful according to Jigme Singye.

He said that although most of the clauses in the guideline are applicable, some restrict business. “It’s like they tell you to work but your hands are tied.”

He said that the authorities have not consulted the relevant stakeholders when framing the guideline.  “When they make such guidelines, we are the stakeholders. We are the ones who have to follow the guideline after it is framed.”

However, Sonam Tashi with Miniature Bhutan said that unlike in the past,government policies are conducive to start a business. “Government has made it in such a way that everything is there for you; the only thing you have to do is have an idea and the drive for it.”

Kinley Wangdi of Green Vibes said that whatever ideas people bring, there are agencies such as Loden Foundation, banks, and Rural Enterprise Development Corporation Limited from where one could get loans for startup capital.

He said that if there is an idea, basic and advance entrepreneurship courses are provided for free. “Don’t be afraid and it’s your passion that drives you to success. Don’t get held back thinking there is no money to start.”

Sonam Tashi said it took him nine years to become an entrepreneur as his family members opposed to the decision. “In Bhutan, people still perceive that there is no place for entrepreneurs or business. It’s all about having a decent job with a salary at the end of each month.”

Others such as the Gyaltshen Dairy Farm in Punakha and K.Essences from Trongsa said they face difficulties in getting pure jerseys and obtaining bottles and distilleries for essential oil.

Pema C Gyaltshen of K.Essences said the startup face difficulties obtaining materials such as glass jars, and laboratory equipment for pure oil, most of which have to be imported. “Last year the entire fund went to buy raw materials to extract the oils but the distillery being small can extract only little at a time.”

She said youth today are unaware about how to become an entrepreneur. “We need more youth thinking of innovative ways to do something which is not being done by others. We need more creativity.”

Department of Cottage and Small Industry issued 2,042 cottage and small industry (CSI) licenses from June 2016 to November 2017. There are 19,406 licensed and operational CSIs as of November.

Karma Cheki

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