Access to finance remains a major hurdle for entrepreneurs in Bhutan, particularly for startups and small businesses looking to expand their operations. However, industry leaders and government officials are encouraging business owners to look beyond traditional bank loans and explore alternative sources of funding.
The issue took centre stage at Druk Tshongrig Gatoen 2026, where discussions highlighted the potential of equity financing to help entrepreneurs overcome financial constraints and build sustainable businesses.
For many emerging businesses, obtaining a bank loan can be difficult due to collateral requirements and repayment obligations. These challenges are particularly significant for startups that may have promising business ideas but lack the assets or financial track record needed to secure conventional financing.
Equity financing offers a different approach. Instead of borrowing money and committing to regular repayments, entrepreneurs can raise capital by offering investors an ownership stake in their businesses.
Unlike traditional lenders, who primarily assess repayment capacity, equity investors consider a company’s growth prospects and potential for long-term returns. This arrangement also allows investors to share the financial risks associated with running and expanding a business.
Gyem Lhamo, Assistant Programme Officer at the Department of Employment and Entrepreneurship under the Ministry of Industry, Commerce and Employment, said equity financing could provide entrepreneurs with both financial assistance and guidance.
“In equity financing platforms, the responsibility and risk are shared by the investors also. For instance, if an investor sees a potential business and invests 500,000 ngultrum in it, and if the business does not do well, the investor will be there to support and guide, taking the risk and responsibility for the business,” she said.
The benefits of such arrangements are already being experienced by some Bhutanese startups.
Jigme Tashi Namgyal of Jaggle AI said his company chose to seek equity investment rather than approach banks for financing, largely because of the collateral requirements associated with conventional loans.
“We did not opt for bank loan as our business is a small startup; there has to be collateral. In Bhutan, equity financing is still growing, but we were lucky enough to get one investor. Having an investor is also having a strategic partner and an adviser,” he said.
His experience highlights how private investment can provide businesses with more than financial resources. Investors can also contribute industry knowledge, strategic advice and business connections that may help entrepreneurs navigate challenges and identify opportunities for expansion.
Although equity financing is still developing in Bhutan, the discussions at Druk Tshongrig Gatoen underscored its potential as an additional avenue for entrepreneurs seeking capital.
However, unlike bank loans, equity investment requires business owners to give up a share of ownership and potentially some control over business decisions. Entrepreneurs must therefore assess their financing needs and long-term business goals before choosing an investment arrangement.
As Bhutan seeks to strengthen its entrepreneurial ecosystem, improving access to capital will remain important. Equally significant will be ensuring that entrepreneurs are aware of the financing mechanisms available to them and understand how to use these opportunities to support business growth.
For aspiring business owners, the path to expansion may no longer depend solely on securing a bank loan, but also on finding investors willing to share both the risks and rewards of building a successful enterprise.
