Government to seek additional funds as ESP Education Loan demand exceeds budget

The government’s Economic Stimulus Programme Education Loan Scheme is facing a funding shortfall within its first year due to overwhelming demand. The Bank of Bhutan received over 1,100 applications worth over Nu 1.1bn, surpassing the initial allocation of over half a billion ngultrum for the scheme. The government, however, assures that it will support all eligible applicants despite the shortfall. When applications for the ESP Education Loan Scheme opened on 2nd June, Bank of Bhutan received applications worth over Nu 266 M. With only about Nu 169 M remaining for the four-year scheme, the bank suspended loan applications on the same day. Following public concerns, the government reopened the application window, which remained open until the end of last month, resulting in the current total of 1,188 applications. During a meeting held later last week, the ESP Steering Committee decided that all eligible applicants will be supported. The committee also directed the ESP Secretariat and the Ministry of Finance to explore additional funding, as the current ESP allocation is insufficient to meet the total loan requirement. According to the Office of the Cabinet Affairs and Strategic Coordination, the Bank of Bhutan has to complete application verification by the 15th of this month before sanctioning loans. The government will then begin exploring the required additional funding. To qualify, applicants must come from families with a combined annual income of less than Nu 500,000, verified through the Department of Revenue and Customs and census records. Each applicant can apply for up to 1.5 million ngultrum under the scheme. Applicants must also be enrolled in undergraduate or TVET programmes at Bhutan Qualifications and Professionals Certification Authority-accredited institutions. They must be under 25 years of age, study full-time, and not receive a full scholarship. Since the launch of the scheme in July last year, 567 students received loans totalling over Nu 431.39 M. The government initially allocated 600 million ngultrum for the ESP education loan, with Nu 150 M planned for disbursement each year over four years. Kelzang Chhophyel Edited by Phub Gyem The post Government to seek additional funds as ESP Education Loan demand exceeds budget appeared first on BBSCL.