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(KPL/Xinhua) The Asian Development Bank (ADB) on Tuesday said it has approved a 15-million-U.S.-dollar financing package to strengthen the banking and capital markets and enhance financial inclusion in Bhutan.
The assistance comprises a 10-million-dollar policy-based loan and a 5-million-dollar policy-based grant.
The ADB said the program aims to improve Bhutan's financial stability by supporting economic diversification and robust private-sector development.
The program also advances financial inclusion by enhancing green finance and digitalization, and by expanding financial literacy for underserved communities.
According to the bank, Bhutan's financial sector faces unique challenges, including limited economic diversification, reliance on imports, high nonperforming loans, constrained fiscal space, and weak foreign direct investment inflows.
These challenges compound existing disparities: rural poverty remains high at 17.5 percent, while social safety nets are ill-equipped to help communities adapt to extreme weather events such as floods and landslides.
The program will support reforms to stabilize the banking system, develop deeper capital markets, and promote green and inclusive finance.
Key activities include improving asset quality and regulatory frameworks, establishing credit rating agencies, and creating a national framework for green and social bonds to attract sustainable investment.
KPL
