Streamlining loans

December 11, 2009: Talked since 1997, Royal Monetary Authority (RMA), the central banking authority, has finally launched Credit Information Bureau (CIB) Project that is expected to ease the teething process customers have been facing to get loans from banks and other financial institutions.

Initially, the project will be a test run in banks for three months before making it fully functional by June 2010. To these days, it takes days and weeks for individuals to get their loan applications approved. The new system is expected to ease the problem.

The primary function of the CIB will be supply credit history of individuals to financial institutions on receipt of the application for loans making it easy for the financial institutions to get all information necessary to determine the credit worthiness of the client. Fax is the only means for financial institutions today to exchange the credit history of new applicants.

The CIB will collect details of all 67,000 credit accounts of the five financial institutions in the country. One-third of the works has been completed so far.

Getting loans without collateral is also common problem for most small and medium businesses, which might risk the financial institutions of getting their money lost.

Services, expanding township areas, transportation and small enterprises are some of the core areas where people have started seeking increasing loans from the financial institutions in recent years.

Most of the loan seekers are government employees, who get loans from Bhutan National Bank (BNB) in cheaper rates. The program, called GE loan, began in 1997 and has become one of the most successful ventures of the bank.

Even the companies registered under the Royal Securities Exchange of Bhutan are legible to take GE loan. A person with three years working experience is eligible to take GE loan but should have a guarantor working in the same company in a higher grade.