Bhutan: Micro, Small and Medium-Sized Enterprise Sector Development Program - 2011

Background

The goal of the Micro, Small and Medium-Sized Enterprise Sector Development Program (MSMESDP) 2 was to stimulate growth of the MSME sector, and overall private sector development in Bhutan. The MSMESDP consisted of both a program grant for addressing policy reform issues and overall strengthening of the environment for MSME growth, and a project grant for providing financing for development of the MSME sector currently unavailable from the commercial market.

The objectives of the MSMESDP included:

  1. undertaking policy reforms for establishing an integrated policy, strategy, and institutional framework for MSME development;
  2. modifying laws and regulations so as to facilitate MSME expansion;
  3. increasing access to market-based finance; and,
  4. strengthening the country’s business support infrastructure.

Key points

Development aims and impacts:

  • Bhutanese women are active in the micro, small, and medium enterprise (MSME) sector, mainly as micro entrepreneurs. Their participation in, and contribution to this sector must be addressed if they are to benefit from a policy, strategy, and institutional framework designed to encourage MSME growth.
  • Enhancing access to credit is key in supporting the heightened interest of women—especially young women and rural women—in entrepreneurship.

ADB processes and management tools:

  • Allocating a specific percentage share of credit lines to women in rural areas contributes to mitigating rural poverty and curbing rural-urban migration.
  • Identifying niche markets for Bhutanese MSMEs could potentially benefit women who currently produce low-volume, high-value goods already identified by the project (e.g., medicinal plants, organic herbal plants, and essential oils).

This case study is part of the ADB publication Gender Equality Results Case Studies: Bhutan that provide an overview of gender issues in selected sectors of developing member countries.