ADB Loan to Sustain Financial Inclusion, Economic Diversification in Bhutan
MANILA, PHILIPPINES (28 October 2020) — The Asian Development Bank (ADB) has approved a $30 million loan to support Bhutan’s policy reforms in financial market development.
These reforms and improvement of the technical capacity of regulatory and financial institutions aim to increase private sector access to the financial market, improve financial inclusion, and enable economic diversification in Bhutan.
“The ultimate goals of these reforms are greater stability, efficiency, and inclusiveness so that the financial market could play its pivotal role in development,” said ADB Financial Sector Specialist for South Asia Manohari Gunawardhena. “The program will address financial sector deficiencies and vulnerabilities and help improve compliance through planned implementation of risk-based supervision.”
The objectives of the program are aligned with key result areas of Bhutan’s 12th Five Year Plan, 2018–2023, such as macroeconomic stability, economic diversification, improving access to finance, and poverty reduction. Specifically, it will support the government’s Financial Sector Development Action Plan, which covers the banking system, nonbank financial institutions, financial inclusion, and financial literacy.
The loan will build on the first $30 million subprogram extended by ADB and implemented from January 2018 to October 2019. ADB has been instrumental in helping strengthen Bhutan’s financial system, including the central banking role of Royal Monetary Authority of Bhutan as the single regulator of banks and nonbanks through the adoption of the Financial Institution Act of 1992.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.