Bhutan

Income Generation Start-up Support Programme

The Income Generation Support Programme (IGSP) is a financial support initiative established as part of the Human Security Project of the UNDP. The IGSP is set up under the Ministry of Labour and Human Resources to support self employment of youth in micro and small businesses. The IGSP is aimed at youth who do not have access to mainstream credit facilities needed to start small businesses and designed to assist those who have the necessary skills and the drive but without the required capital or collateral to access mainstream credit facilities to start small income generating enterprises.

The IGSP was initiated at a time when the Royal Government was facing a major challenge of addressing youth unemployment. The national unemployment rate has increased from 1.8 % in 2003 to 4 % in 2009 and unfavorably, youth constituted a disproportionately large segment of the unemployed.  With an estimated 93,000 youth who would be entering the job market during the Tenth Five Year Plan, job creation has been a major challenge confronting the Royal Government vis-à-vis the saturation of job openings in the civil service and the inability of the private sector to generate adequate employment opportunities.  

Self employment and entrepreneurship have become the strategic tool and an alternate option to engage unemployed youth meaningfully. Considering entrepreneurship as an important strategy for self employment and a useful tool for job creation in the micro, small and medium enterprises, the IGSP was initiated in the three highest poverty incidence Districts viz.: Zhemgang, Mongar and Samtse. The project aimed at enhancing the livelihood of the population of the targeted regions by promoting economic activities through the development of micro small and medium enterprises (MSMEs).

A total of 63 unemployed youth (29 Male and 34 Female) were trained in Entrepreneurial Skills Development as part of the implementation arrangement of the IGSP. The trainees were taught on the fundamentals of small business management such as production, marketing, organization and finance & accounts. In addition, they were also educated on how to develop and review their business plan, identifying their core competencies and familiarization with the legal issues in business.

Of the 63 trained youths, the IGSP supported 56 unemployed youth in 44 small business establishments promoted individually as well as in groups of two or three. The established businesses are mostly in the manufacturing and the service sector specifically for their enormous contribution to deliver social services and product development. Most importantly, these two sectors sizes have huge potentials in creating jobs and promoting innovative business ideas. 

UNDP's involvement in the IGSP has made differences in the lives of 56 unemployed youths. The IGSP programme has not only benefited individual beneficiaries in starting small income generating businesses but also promoted entrepreneurship in micro, small and medium sector as an alternate career option amongst Bhutanese youth.

Indeed, the benefits of the UNDP's support stretches beyond the happiness of individual beneficiaries. The IGSP has encouraged unemployed youth to take up entrepreneurship as a viable career option, boosted economic activities in the Districts, ensured service benefits through service business and contributed to job generation from the businesses.
Within six months from the commencement of the 44 businesses by the IGSP beneficiaries, a total of 67 jobs have been generated (including part time paid workers). The IGSP has also helped in mitigating rural urban migration by gainfully employing youth in rural areas through entrepreneurial undertakings. The IGSP has contributed to the ultimate aim of reducing poverty and hunger.

Some of the IGSP Beneficiaries:

Chimi Wangmo, Pelzang Lhamo and Sonam Choden were trained in souvenir making. Although, they were interested in starting a small business of their own, the lack of capital and the lack of collateral for accessing mainstream credit facilities prevented them from doing business. The IGSP has enabled them to start their small souvenir making unit at Mongar and helped them in commercializing their skills in souvenir making.