Priority Sector Lending (PSL) is a scheme to promote and identify the cottage and small industries (CSI) as a priority sector for targeted lending and increased coordination and efficiency in the delivery of government support schemes and incentives. PSL is a lending based on insurance on the proposed project assets.
ELIGIBILITY
- Farmers
- Unemployed youths,
- Farmers or unemployed youths can apply for PSL loans individually, group/cooperatives and also form a company.
- Applicant(s) should be Bhutanese citizen holding valid Citizen Identity Card;
- Group / cooperative borrowing should have minimum of 3 members and only one person will be eligible from one household.
- Individuals, Groups and/or cooperatives wishing to avail Agricultural CSI related financing must register with the MoAF.
- Applicant(s) should be of sound mind;
- Applicant(s) should have good credibility with clean CIB track record;
- The business activities should be within the frame work as per PSL guidelines (Table 2: Activities and Products, pg 4-5).
- PSL financing will be available for both new CSI businesses/startups as well as for CSI business expansion.
LOAN LIMITS
- Individuals – Loan limit of Nu. 0.5 million (max. investment size) for primary production under Agricultural CSI
- Integrated Activity – Nu.10 million
- Groups / Cooperatives – Nu. 10 million (max. investment size)
- Registered with DAMC/Forestry (Agri)
- Partnership businesses (Non-Agri)
- Incorporated Companies – Nu. 10 million (max. investment size)
The loan limits for agriculture CSI as well as for non-agriculture CSI will be based on the PSL guidelines and will be subject to change as and when PSL guidelines are revised.
TENURE
- Agriculture CSI – 5 years inclusive of gestation period
- Non-Agriculture CSI – 15 years inclusive of gestation period
PREFERENTIAL INTEREST RATES FOR 2018
- Preferential interest rate ceiling for lending to Primary Production under Agricultural CSI: 8%
- Preferential interest rate ceiling for lending to Non-agricultural CSI & value addition in Agricultural CSI: 8.5%
DEBT EQUITY RATIO
- Agriculture CSI (primary production)– 100% debt finance
- Non-agriculture CSI and valued added agriculture CSI – debt equity finance of 70:30.
- CSI: 8.5%
REQUIRED DOCUMENTS
- PSL Application form duly filled in and signed on all the pages (Full signature).
- For loan limit between 0.5 million to 1.0 million – A brief business proposal template duly filled in where applicable.
- For loan limit between 1.0 million to 10.0 million – A detailed business proposal with the financial projections.
- A Copy of valid Citizenship Identity (CID) of the applicant(s) and the Chairman, office bearer and treasurer if applicable.
- One recent Pass Port size photograph of the applicant(s) or the Chairman, office bearer and treasurer as applicable.
- A copy of security clearance of the applicant(s) or the Chairman, office bearer and treasurer as applicable.
- Ownership certificate(s) of the plot where PSL activity is taking place if applicable.
- For land under joint or co-ownership, a consent letter from the joint owner or co-owner witnessed by Gup of the village (if applicable).
- For family owned land, family (household) register issued by Department of Civil Registration and Census, MoHCA and NOC from family members (18 years and above) (if applicable).
- For private land under lease, a Sale Deed agreement and a copy of CID of the owner of the land (if applicable).
- Approved drawing plan of the building or construction and a copy of approval letter for construction from concerned authority (if applicable).
- Off-take agreements if applicable.
- A copy of group resolution or Articles of Association – in-case of partnership/cooperative/groups/company.