Paper

State of Microfinance in Bhutan

Presenting the state of the microfinance sector in Bhutan
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This report provides an overview of the state of micro finance in Bhutan from demand and supply sides.

Bhutan remains a poor country with a national poverty rate of 32 percent. About a quarter of the population lives on $0.46 a day, most of them in rural areas. There is little information on Bhutan’'s microfinance sector. The report is mainly based on donor reports and information from Bhutan Development Finance Corporation (BDFC). It states that credit use is a recent development in Bhutan. Rural credit is still uncommon, but is gaining importance with the introduction of privatization and market economy. Financial markets are not developed and there are few financial intermediaries. Limited financial intermediation is a key constraint in Bhutan. The report discusses:

  • Financial institutions in Bhutan;
  • Financial products of BDFC;
  • Sustainability of microfinance in Bhutan;
  • Demand for microfinance;
  • Impact of microfinance;
  • Regulatory framework for microfinance;
  • Challenges facing microfinance.

About this Publication

By Hussein, M.
Published