Rural enterprises build community economy

incense production
Tenzin Dorji is the successful beneficiary of the REDP. Here he displays his incense production. Photo Sonam Tsoki Tenzin ©UNDP Bhutan

Of late, the people living in Chaskar village in Eastern Bhutan have a local champion to look up to. Tenzin Dorji has brought about a quiet revolution to the village. The innovative young man was never short of dreams. In 2010, he decided to establish an incense-manufacturing unit. His proposal to the Ministry of Economic Affairs stated that the unit would help generate additional cash income to support his family and his community.

Highlights

  • Armed with UNDP grant of Nu. 250,000 (approx. USD 5000) Tenzin Dorji started a small business enterprise.
  • Today, Tenzin Dorji not only meets local incense demand, but also supplies to shops and religious institutes in the neighboring district of Trashigang, Lhuentse, Bumthang and Paro.
  • He has successfully generated employment for school dropouts and single parents.
  • The Royal Government of Bhutan (RGoB) plans to upscale this programme in the 11th Plan (2013-2018).
  • The REDP is expected to promote the growth of cottage and small industries in rural areas.

With UNDP's support, the Ministry of Economic Affairs (MoEA) approved Nu. 250,000 (about USD 5000) and Tenzin Dorji started an alternate small business enterprise. He bought an incense pulverizer and mixer grinder. Soon, he was supplying incense to Mongar. In August 2011, he installed new equipment that upped the production capacity of his unit substantially. Concomitantly, Tenzin’s revenue increased from Nu. 20,000 (about USD 400) to Nu. 120,000 (USD 2400) per month by the end of 2012.

Today, Tenzin Dorji not only meets the local demand for incense, but also supplies to shops and religious institutes in the neighboring district of Trashigang, Lhuentse, Bumthang and Paro. The young entrepreneur has generated two additional jobs and currently, he has employed ten people (six women and four men), mostly school dropouts and single parents. Their monthly salaries have also been increased from Nu. 4,000 (about USD 80) in 2011 to Nu. 5,400 (about USD 100) in 2012. The employees say that working in the incense unit has addressed their income needs, especially that of disadvantaged widows.

Tenzin Dorji is a direct beneficiary of the UNDP Rural Enterprise Development Programme (REDP), a project implemented by the Department of Cottage and Small Industry under MoEA with the aim to alleviate rural poverty. The Regional Director of Trade and Industry in Mongar, Aiman Mahat, who monitors the implementation of the project, has expressed his satisfaction about the project.

For Tenzin Dorji, the UNDP REDP was the turning point in his life. He is confident and motivated by the small success. "I am fortunate to have received the grant," he says, adding his sales turnover will only get better. He has plans to expand his business and capture markets in other western districts of Thimphu, Punakha and Wangdue. He also plans to employ additional staff.

In view of this positive impact, the Royal Government of Bhutan (RGoB) has plans to upscale this programme in the 11th Plan (2013-2018) through formulation of policy framework as well as through provision of various incentives such as tax holiday. This is expected to promote the growth of cottage and small industries in rural areas.

"What we are trying to do now is to have a balanced development whereby the opportunity to earn a good living is also available in the villages and districts. That's why the government is putting so much emphasis on rural development." Lyonpo Yeshey Zimba, Minister of Works and Human Settlement.