The Royal Monetary Authority (RMA) is the leading agency spearheading financial inclusion and financial literacy in the Kingdom of Bhutan. It is committed to providing inclusive opportunities and raising awareness among the unserved and underserved segments of the population.
As part of the country’s emerging financial system, the National Financial Literacy Strategy (NFLS) 2018–2023 is a collaborative strategic initiative of the RMA to promote financial knowledge, confidence and consumer protection to the people of Bhutan. The NFLS 2018–2023 is also the first initiative of the RMA to align with its vision, mission and strategic pillar of reinforcing stable and economic growth through its strategic priorities to promote financial inclusion and financial literacy.
Several initiatives have been undertaken to advance financial inclusion and financial literacy in Bhutan, especially since the country became a member of the Alliance for Financial Inclusion (AFI) in 2010, and its subsequent commitments under the Maya Declaration in 2014. The RMA’s efforts to create a more attractive enabling regulatory environment for financial inclusion are outlined in detail in the NFIS 2018–2023 document.
The NFIS has captured the current state of access to financial products and services in Bhutan. As of December 2017, 64.47% of adults in Bhutan had a savings account with a bank while only 16.08% had access to credit and 17.79% had a life insurance policy. In terms of access points, 64% were agents and 23% POS. Branches, ATMs and extensions recorded the lowest numbers due to high costs of operation. Microfinance institutions (MFIs) are picking up, but there are still only 29 branches (0.59%) available per 10,000 adults. According to the Bhutan Living Standard Survey Report (BLSS) 2017, access to household loans are more prevalent in urban areas (42%) than rural areas (33%). Bank loans are primarily used to purchase vehicles (27%), construct houses (25%) and for personal consumption (15.9%).
Interventions are required to address these issues, such as increasing access and usage of long-term savings, productive credit and insurance. A focus on rural areas and strengthening microfinance and other access points are also necessary. The Financial Inclusion and Literacy Division was set up in January 2017 to formulate the NFLS and spearhead all financial literacy activities in Bhutan.