Bhutan: Financial Market Development Program (Subprogram 3)

Sovereign Project | 51252-005

The proposed program modality is a programmatic approach. It consists of three subprograms that are designed to allow ADB to remain engaged and to help the government implement increasingly complex long-term finance sector reforms. Under this third subprogram, there are 3 reforms areas. Reform area 1: Nonbank financial systems developed. This will concentrate on secondary market development and an insurance strategy, including alternative investments and housing finance schemes focusing on gender-based requirements, while improving governance rules in capital markets. Reform area 2: Stability and integrity of the financial system strengthened. There will be focus on implementing the International Financial Reporting Standards 9, revised rules on anti-money laundering based on requirements, and full alignment with Basel III, leading to enhanced stability, efficiency, and inclusiveness in financial markets. Reform area 3: Financial inclusion promoted.

Project Details

  • Project Officer
    Gunawardhena, Manohari
    South Asia Department
    Request for information
  • Approval Date
    22 October 2021
  • Country
    Bhutan
  • Sector
    • Finance
Project Name Financial Market Development Program (Subprogram 3)
Project Number 51252-005
Country Bhutan
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 4130-BHU: Financial Market Development Program (Subprogram 3)
Concessional ordinary capital resources lending US$ 30.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Finance / Central banking systems - Housing finance - Money and capital markets

Gender Equity and Mainstreaming Some gender elements
Description The proposed program modality is a programmatic approach. It consists of three subprograms that are designed to allow ADB to remain engaged and to help the government implement increasingly complex long-term finance sector reforms. Under this third subprogram, there are 3 reforms areas. Reform area 1: Nonbank financial systems developed. This will concentrate on secondary market development and an insurance strategy, including alternative investments and housing finance schemes focusing on gender-based requirements, while improving governance rules in capital markets. Reform area 2: Stability and integrity of the financial system strengthened. There will be focus on implementing the International Financial Reporting Standards 9, revised rules on anti-money laundering based on requirements, and full alignment with Basel III, leading to enhanced stability, efficiency, and inclusiveness in financial markets. Reform area 3: Financial inclusion promoted. This includes financing inclusive green finance and financial technology to promote digital inclusion. The impact of the reform will be the improved economic welfare of the Bhutanese people, especially women, through increased employment, private sector business development, enhanced access to finance, and greater efficiency of financial intermediation. The program will support the government with institutional reforms while improving the technical capacity of regulatory and financial institutions.
Project Rationale and Linkage to Country/Regional Strategy The program will support the government in its commitment to continue reforms to make the finance sector more responsive to emerging priorities, while remaining stable and inclusive. This support is critical for the government to achieve national key result areas of the Twelfth Five Year Plan, 2018 2023, such as macroeconomic stability, economic diversification, improving access to finance and poverty reduction. The government has already prepared several long-term sector development strategies. In 2017, the government approved the Financial Sector Development Action Plan, which details reform actions that affect, among others, the banking system, nonbank financial institutions, and financial inclusion and financial literacy.
Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services N/A
Procurement N/A
Responsible ADB Officer Gunawardhena, Manohari
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Ministry of Finance
Royal Government of Bhutan
Thimphu, Bhutan
Attention: Director
Timetable
Concept Clearance 18 Dec 2022
Fact Finding 16 Feb 2021 to 19 Feb 2021
MRM 17 Aug 2021
Approval 22 Oct 2021
Last Review Mission -
Last PDS Update 22 Oct 2021

Loan 4130-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Oct 2021 03 Nov 2021 08 Nov 2021 31 Dec 2021 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 30.00 Cumulative Contract Awards
ADB 30.00 18 Nov 2021 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 18 Nov 2021 0.00 0.00 0%

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Related Publications

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Tenders

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Contracts Awarded

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Procurement Plan

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