Loan Product for Rural/Farmers

Group Guarantee Lending & Savings Scheme (GGLS)

The principal goal of the (BDFCL)Bhutan Development Finance Corporation Limited is to assist the small rural entrepreneurs to increase on-farm and off-farm production thereby increasing their income and standard of living. The increase in production on a nation wide basis will assist Bhutan to become self sufficient in food thus fulfilling one of the major aims of the government. Towards this end, Micro-Finance is recognised as a powerful tool in accelerating the socio-economic development of the most disadvantaged segment of the rural society. The reasons behind the success are: Small loans based on group guarantee, tied with savings 1. Loans among people who know each other well 2. Decentralisation on loan decisions 3. Powerful sanctions for delinquents 4. Peer pressure and support Acknowledging the impact of this small but important tool, BDFC had also subscribed to it by introducing small loans based on group guarantee and savings under the Group Guarantee Lending and Savings Scheme (GGLS). The experiences of successful micro-credit programs of the CARD bank Philippines and the Grameen Bank in Bangladesh have been used for replication. However,modifications have been made in order to adjust the group scheme to the physical, socio-economic, cultural and demographic circumstances in Bhutan. #Who has skills & willingness to work hard. #Who can work in group & Co-guarantee. #No Collateral required. #Come from same socio-economic background. #Who do not qualify under SIL Scheme. #Maximum amount up to Nu.50,000. #Interest Rate:10%.

Small Individual Loan Scheme (SIL)

Bhutan is an agrarian economy with over seventy-nine percentage of total population primarily engaged in agriculture and livestock related activities. This large segment of the population lives in the rural areas. Considering this fact, it is of utmost importance to provide the necessary service facilities for the Agriculture and Animal Husbandry sectors, which would have immense bearing on the livelihood of the people. The essential service facilities primarily consist of three items, not limiting to i. Inputs- (seeds, seedlings, fertilizers, tools, implements and other inputs), ii. Credit; and iii. Market . The availability of the above three items, which are referred as " Three Pillars of Agriculture Sector" would boost the production of the agriculture sectors, increase rural income, and enhance the living standard of ourpeople. These would ultimately lead to the achievement of our overall national objective of "food-self-sufficiency". As mentioned above, credit is one of the important catalyst for the enhancement of the production of the Agriculture Sector. Since Agriculture Lending Department (ALD)of the BDFC is the only institution in the country providing the rural credit, it is of prime importance to deliver the credit services to the rural communities on acceptable terms and conditions and in the most cost-effective manner. The rugged terrain of the country, scattered nature of the rural settlement, and high cost of delivering financial services to the rural areas poses a serious challenge to the ALD, BDFC. Notwithstanding these difficulties, the ALD shall continue to put in concerted efforts and work towards the fulfillment of the objectives that are mentioned below: i. Provide financial, technical and advisory services to the rural and urban entrepreneurs; ii.Promote the agriculture and agriculture related commercial enterprises through developing meaningful linkages with the related agencies; iiiEnhance the rural income and the living standard of the rural communities; iv.Achieve operational sustainability. #Possess proper Thram. #Posses proper House. #Possess National Identity Card. #Small Scale Enterprises. #Entrepreneurial Skills. #Willingness to work hard. #Good Creditbility. #Security 1.1 times in rura areas. #Amount up to Nu.100,000. #Interest Rate: 12-14%.

Commercial Agricultural Loan Scheme (CAL)

To suite the financial needs of the bigger clients and to provide appropriate financing schemes, the ALD- BDFCL has formulated three different loan products, which are currently provided to the customers. The different loan products and the interest rates applicable are as furnished below. #Small,Medium & Large scale Industries. #Excellent Entrepreneurial skills. #Excellent Cedibility & Characters. #Security required 1.5 times(Commercial Value). #Guarantee required if security is inadequate. #Interest Rate:12-15%. * Mobile Banking