RENEW’s Microfinance Loans Empower Women In Rural Regions Of Bhutan

Email

Most women in the rural communities do not have access to financial services but this initiative has been a turning point for many.

Her Majesty the Queen Mother seen here with some women of Bhutan. (Source: Renew.org.bt)

  

By Dechen Dolkar Business Bhutan

33 year-old Pema from Trongsa has been running a hotel since 2017. A single mother of three, she got married at the age of 17 and stayed with her husband and two children in Thimphu for eight years.

When she got divorced, she returned to her village in Langthel and married again. Pema got pregnant but the relationship lasted only a couple of months and she divorced again.

Pema would have had a difficult time sustaining herself and her family through this ordeal had it not been for Respect, Educate, Nurture, and Empower Women’s (RENEW) microfinance services.

How RENEW helped Pema to become an entrepreneur

The RENEW officials visited her village in 2012 to offer support to rural women entrepreneurs.

Without any second thoughts, Pema grabbed the opportunity. 

 

 

Founded by Her Majesty the Queen Mother Sangay Choden Wangchuck in 2004, RENEW (Respect, Educate, Nurture and Empower Women) is a non-profit organisation dedicated to the empowerment of women and children in Bhutan.

Photo: Facebook/Bhutan Renew

 

“At our village, we don’t have enough land to cultivate so I decided to start a small business.”

She took a beginner-phase loan of Nu 25,000 from the RENEW micro-finance to set up a grocery shop in Langthel.

Since then, there has been no looking back for her. “I used to save a sum of Nu 150 daily for the loan repayment,” she said.

She repaid the loan in six months and again she availed the second phase of the loan to upgrade her shop. So far, Pema has availed loan from RENEW microfinance seven times.

In 2017, Pema moved to Trongsa where she upgraded her shop to a hotel. Currently, she is saving money to educate her children.

“Now I am living independently with my children and I do not want to get married again,” said Pema.

To date, the Royal Monetary Authority (RMA) has approved five microfinance institutions (MFIs) in the country. They are: RENEW, Bhutan Association of Women Entrepreneurs (BAOWE), Tarayana Foundation, Bhutan Care Credit and Rural Enterprise Development Corporation Limited (REDCL).

The central bank initiated microfinance in 2014 and also outlined the rules and regulations of deposit-taking micro-finance institutions and regulations on microloans institutions.

Most women in the rural communities do not have access to financial services but this initiative by the RMA has been a turning point for many.

It is mandated by the central bank that 80% of the micro-finance services should cover rural areas and 20%, the urban areas.

The positive impact of RENEW

RENEW’s micro-finance project was initiated in 2012. So far, it’s saving amount has reached Nu 100mn and around 2,200 clients have borrowed about Nu 79 mn worth of loans.

As of November 2018, the project had more than 15,500 clients in nine different dzongkhags such as: Samtse, Trashigang, Dagana, Trongsa, Bumthang, Punakha, Thimphu, Wangduephodrang and Tsirang.

RENEW’s micro-finance project strives to improve the status of women and their families, especially those living under extreme circumstances.

 

Women seen in a rice field in Bhutan.

Photo: Druk Asia

 

Assistance is also extended to vulnerable women to help them become economically independent.

Loan procedures set by RENEW Microfinance

Chief Operating Officer of RENEW Microfinance Private Limited, Tshering Dema said that like any other banks, the clients have to open an account with RENEW to avail the loan but it is collateral free.

Since it is an unsecured loan, to mitigate the risks of defaulting, the members need to form a group of a minimum of five members.

The field officers of RENEW will then go to each village every single day, so a lot of cost is involved.

They have designated spots where people can avail loans and deposit money. If one member needs to avail a loan, four members would need to sign up as guarantors.

Tshering Dema said that most of their clients are women including housewives. RENEW micro-finance also gives loan to single fathers who comprise around 15 male clients.

“We don’t want any kind of complication arising between the couple and family, so husband or family are also involved as external guarantors because most of the loans are for households,” she said.

Clients who avail microfinance services should be aged 18 to 60. They need to save money in their savings account for at least four months before they avail the first loan. This is to minimise risks and it will also allow time for RENEW to know the clients better.

The clients can save a minimum of Nu 100 and maximum of Nu 3000. By the time they avail the loan they must have 10% of the loan amount in the voluntary account.

The maximum loan ceiling is Nu 120,000 while the minimum is Nu 5,000. The repayment duration is 12 months for loans ranging from Nu 5,000 to Nu 80,000 while it is 18 months for loan amounts of Nu 100,000 to Nu 120,000.

The minimum interest rate for the loan is 18% per annum and the maximum is 24%.

Most of the loans are for business purposes, agriculture loan, multipurpose loans and emergency loans.

“Most of the loans are business loans because we want our clients to generate income,” said Tshering Dema.

 

This article first appeared in Business Bhutan and has been edited for the new Bhutan Times.

 


Related Posts

RENEW, Empowering the Disadvantaged

The organisation, which works towards renewing the dignity of women, addresses the issues of gender inequality through...

Dec 14, 2017 11:04

RENEW vocational centre to empower women opens in Selekha

Rehabilitation center for women with economically challenged background and survivors of domestic violence. The home has...

Aug 07, 2017 14:55

First-Ever Women’s Edition Of The Start-Up Weekend In Bhutan Aims...

Eighteen women from diverse backgrounds took part in the event, where they pitched business ideas, worked in teams and...

Nov 27, 2018 13:26

Female Archer Dorji Dema Hopes To Inspire More Women To Take Up...

Dorji Dema, a mother of three is among the first women in Bhutan to play in an archery tournament.

Nov 05, 2018 08:11

Woman In Bhutan Seeks To Set Up Greenhouse Project To Help Single...

Tshering Lhamo said that once her project proposal is ready, she will apply for a loan to realise her dream embarking on...

Sep 07, 2018 16:58

Founder Of ‘Sushi’s Candles & Crafts’ Wants To Inspire More Women...

Sushanta wants to set a shining example for more women in Bhutan to fulfil their dreams of starting their own...

Jan 05, 2019 15:19

Latest

News

Employment opportunities amid crisis - Tour guides opts farming

A tour guide could earn a minimum of Nu 30,000 per month during the peak tourist season in Bhutan. The income made was sufficient to support...

May 19, 2020 19:53

Covid-19 response must address gender-based violence, other rights of women and girls

“The social and economic stress that Covid-19 pandemic brings upon households places women and girls in vulnerable positions, burdening them...

May 12, 2020 16:46

Features

Haa- Home of Ap Chundu, the omnipresent local guardian deity

Haa is one of the smallest districts in the country and is highlighted by the Wang chu Lo Dzong which is the administrative centre of the...

May 20, 2020 18:24

Convertible currency earnings hit

Bhutan was set to have one of the best years in tourism after the Lonely Planet in October 2019 recognised Bhutan as the number one travel...

May 19, 2020 08:32

Sports

Karma – Female Archer From Bhutan Qualified For Tokyo 2020 Olympic Quota

Karma has been specialising in Olympics-style archery since 2009.

Nov 30, 2019 13:18

Bhutan’s Pelden Wangchuk Wins 10th Edition Of Tour 0f Dragon Mountain Bike Race

This year, the race also saw the highest number of female participants compared to past years.

Sep 10, 2019 01:08

Business

Celebrating Bhutan’s Entrepreneurs: Namkhar Gyaltshen Of Transcend Artisan

This story is part of an exclusive feature by Yeewong Magazine in Dec 2018 on celebrating entrepreneurship in Bhutan.

Mar 06, 2020 11:48

Centre Of Excellence For Software Engineering Launched By Bhutan’s Thimphu Techpark

The purpose of establishing this centre is to fulfil His Majesty the King’s vision of using technology to solve problems.

Feb 24, 2020 23:58

Travel

Reasons Why Dagala Trek is Every Trekkers Dream

May 13, 2020 11:30

Into The Wilderness During The Best Trekking Season In Bhutan

The jagged and unforgiving mountain landscapes of Bhutan make some of the best mountain trekking routes on the planet. Undoubtedly one of...

May 05, 2020 17:35

Lifestyle

Food on Wheels- First of its kind in Bhutan

The World's Largest Fast Food Restaurant Chains doesn't exist in Bhutan.

Mar 04, 2020 09:39

Amazing Stories from the Eastern Part of Bhutan

You can't say you have visited the eastern part of Bhutan unless you have experienced the following bizarre things.

Mar 02, 2020 19:02

Subscribe to our newsletter

Never miss out on new happenings and news stories!

Download Daily Bhutan Mobile App

Connecting with us just got easier!