BoB initiates collateral-free loans for skilled desuup entrepreneurs

Three desuups signed loan agreements with BoB for the purchase of computers during the launch

The bank will provide collateral-free business loans up to a maximum ceiling of Nu 5-million


Skilled desuups who wish to start their own business can now avail themselves of financial loans without having to worry about collateral as is the present norm.

This innovative program comes following the launch of the DSP (Desuung skilling program) start-up loan by the Bank of Bhutan (BoB) on 11 May in Thimphu, which has done away with the mandatory collateral requirement.

Instead of collaterals, the lending agreement requires a guarantee by another eligible desuup applying for the start-up loan.

The aspiring entrepreneurs can now avail of collateral-free business loans up to a maximum of Nu 5-million with a loan tenure of up to 20 years depending on the nature of the loan.

The bank will allow the loan ceiling of Nu 0.5-million for individuals, Nu 1- million for partnerships, a maximum of Nu 5-million for five or more partners, and Nu 5-million for cooperatives.

The loan has been approved and classified under the priority sector lending portfolio and is desirable for its relatively low interest rate of 8 percent with a long repayment duration that would benefit the desuups availing these loans.

The eligibility for the loan includes successful completion of training on the DSP training program and DSP financial literacy, a clean credit record, and a letter of recommendation from De-suung office.

Access to finance has been one of the biggest impediments and many new ideas for businesses come to an end because of a lack of financial support and the requirement for a guarantee of repayment in the form of high-value collateral. 

However, this scheme which does not require collateral will enable any eligible and interested desuup to start a business.

It is also aimed at addressing the problem of high levels of youth unemployment and strengthening the economy by supporting young budding entrepreneurs to pursue business and create employment opportunities.

During the launch, three desuups signed loan agreements for the purchase of computers.

Karma Norzin, who recently completed her DSP training, said, “I am eternally grateful to His Majesty for granting me the opportunity to get trained in digital marketing and learning skills to support myself.” 

“I am also very relieved that BoB has come up with this loan scheme and I can now buy a good laptop and start earning some income,” she said.

Speaking at the occasion, BoB’s Chairman Karma Yonten said that the loan support to skilled desuups is a mark of deep appreciation for the exceptional services rendered by desuups during the pandemic.

“The desuups had proved to be hard-working, dedicated, and dependable during these challenging times and with the skills that they had acquired,” he said, adding these desuups would do well in business and look forward to a long-term partnership with Desuung.

DSP has trained 2,316 desuups in 96 different training programs, while 1,007 desuups are currently being trained in 47 training programs.