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Opposition Motion to Close down REDC, the erstwhile BOIC

Posted on :08 June 2016

The Member of North Thimphu Constituency on behalf of the Opposition Party moved the motion to close down Business Opportunity Information Centre(BOIC) which is now known as Rural Enterprise Development Corporation (REDC).

 

Moving the motion, he submitted that the Bhutan Development Bank Limited (BDBL) is most suited to include the portfolio of  Revolving Fund I (RF-I for Cottage and Small Industries) into its loan products without having to establish another new enterprise. He added that BDBL has the largest portfolio of rural enterprise loans in the country. While most of the members from Opposition party acknowledged the principles and benefits of REDC for people, they questioned on the legality of establishment of REDC following the executive order of the Government. Good number of Members pointed out that REDC was not established in keeping with the provisions of the Public Finance Act, Royal Monetary Act and the Constitution. Some members reasoned  that by using BDBL, the service delivery would be convenient as BDBL was also established for same purpose of rural development.

 

The Minister for Finance reminded the House on the background and basis for starting BOIC, now REDC. He added that loan can be availed from REDC on low interest and require no mortgage. The Minister said that REDC and BDBL are two different institutions, as the former is established for the purpose of rural development while the later functions more on commercial purposes as a self sustaining financial institute. In addition, Minister for Education highlighted that REDC is very much in line with the existing Companies Act and Financial Acts. He also underlined the intention and objectives of REDC which is to develop rural development and poor people who can not provide mortgage to avail loan from other banks. The Minister mentioned that in less than 2 years since its inception, REDC has approved 2100 projects and created 3400 jobs which is a huge contribution to rural economy. Many Members from ruling party highlighted the various benefits that REDC provides to the poor and maintained that there is no legal issue and therefore do not  support the motion.

 

Finally, three recommendations of the motion were separately put to vote but none could be carried through.

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