Presentation on SMEs In Bhutan

Ms. DEKI CHHODENActing Regional Secretary

Bhutan Chamber of Commerce & IndustryBhutan

Chennai, India (11th- 12th Dec 2009)

SMEs in BhutanDEFINITIONIn Bhutan the trade and industrial ventures are

classified based on

initial capital investment which, by definition , consists of paid- in

capital and long term credit. Following the industrial classification

method, manufacturing and services micro enterprises businesses

with investment of: Less than Nu. 1 million (Micro) Between Nu. 1 million and 10 million (Small) Between Nu. 10 million and Nu. 100 million (Medium) More than Nu. 100 million ( Large)

Data DistributionMore than 13,606 (31st December 2008)

industrial and Trade licenses are issued by Ministry of Economic

Affairs so far. Large Scale Enterprises – 128 (1%) Medium Enterprises – 143 (1%) Small Enterprises – 1667 (12%) Micro/cottage – 11668 (86%)

About 99% of licenses are registered as CSMEs.

Current Practices of SMEs development & management

1) Industrial policies of the government:

a) Privatizationb) Use of indigenous raw materialsc) Industry with a potential to exportd) Capital intensive industries

Contd…2. Broadening of the Entrepreneurial

base3. Promotion of CSMI (Cottage, small

and Medium scale Industries)4. Promotion of Traditional

Handicrafts Industries.5. EDP Loan Scheme6. Group Lending Scheme

Problem faced by SMEs in Bhutan

1. General Problems:

a. Lack of Comprehensives policy

b. Data Problems

a. Definition and classification Issues

Problem Contd…2. Business Environment:

a. Lack of enterprise cultureb. Low productivityc. Small Domestic Marketd. No knowledge of Export Markete. Poor Financial Intermediation

Problem Contd…3. Weaknesses within SMEsa. Lack of skilled laborb. Lack of Technical Managerial

knowledgec. Lack of access to Business

Development Servicesd. Low Product Quality and Diversity

Status of SMEs in Bhutan

Priority in numerous RGOB policy statements and documents.

Five year plans. Major CSME activities Enterprise Growth Employment Generation

Activities initiated by the supporting institution to

promote SMEs1. Ministry of Agriculture( MOA)

Extension services and marketing programs

Provision of subsidized farm machinery and other inputs

Agri-business courses in relevant training institutes

Rural Enterprise Development project

Activities to promote SMEs Cont…

2. Ministry of Economic Affairs (MOEA)Rural Enterprise Development

ProjectLicensing and legislation

frameworkBusiness Promotion Section (BPS) Established of MSMEs Division

Activities to promote SMEs Contd…

3. Ministry of Labor and Human Resources (MOLHR)

Entrepreneurship Development Program In-country training program on SMEs

promotion Establishment of vocational training institutes

4. Financial institutions Lending through various schemes of financial

institutions the rural credit.

Cont…Non- Governmental organization (NGOs)

1. Tarayana Foundation Training in pottery, paper making, nettle

weaving

2. Youth Development Fund Training in carpentry skills.

3. Respect, Educate, Nurture and Empower Women (RENEW)

Training in basic computer skills Other skills for enterprise development

Contd…4. Bhutan Chamber of Commerce & Industry

(BCCI) Conducting resource inventory studies for the

promotion of SMEs Identification of project ideas for SMEs

development Delivery of Enterprise Development

Support/Advisory Services Conducting basic entrepreneurship promotion Hosting of Regional, National & International

Trade fair. Business Development services through

outreach programs

Contd….

Planning & Coordination of Capacity Building Trainings/Workshops and Consultative Meetings (Pvt. Sector HRD)

Identifying common SMEs business problems and addressing them

Building networking among various SMEs players/stakeholders

Conducting Feasibility Studies for Enterprise (SMEs) Promotion

Tshongrig – SMEs Tool kit

Trade Opportunities in various sectors

The following are the trade opportunities in various

sectors for SMEs Between Bhutan & India:1. Skills and Technology transfer2. Co-operation among SMEs through IT

enabled services.3. Assist each other in marketing products4. Trade Fair or Exhibition5. Food processing (Agro-based)6. Contact organization as BCCI

THANK YOU FOR YOUR KIND ATTENTION!!!