The Bill Discounting Facility was introduced yesterday by the Finance Ministry in cooperation with the RMA and the FIAB. The goal of this program is to alleviate the ongoing cash flow issues that firms and contractors, especially those working on government projects, experience. By offering prompt access to money and guaranteeing seamless business operations by filling cash flow gaps by turning receivables into instant cash, bill discounting is a financial instrument that seeks to increase liquidity in the construction industry. Three major parties are involved in the facility: government agencies that procure, financial institutions, and contracting corporations. A bill payable is issued when a government agency declares that it is unable to pay a contractor within the prearranged time frame. To obtain quick finance, contractors might negotiate a discount with a banking institution on this charge.
The facility will assist contractors in fulfilling their financial responsibilities and reducing the stress brought on by cash flow problems, according to Tashi Wangyel. Stakeholders expect that the trial phase is now restricted to final bills for finished work, would soon be extended to RA bills and other industries. As part of a test project, the feature is only available for final invoices for finished work. Stakeholders are hopeful that it would eventually be extended to RA legislation and other industries, though. The facility is now exclusively available to government contractors in order to facilitate a seamless launch and get important information for future growth.
