Loan disbursement sees brisk growth
Loan disbursements by microfinance institutions (MFIs) in Bangladesh witnessed brisk growth in fiscal 2021-22 thanks to the expansion of economic activities in the post-pandemic era.
MFIs disbursed Tk 191,883 crore in FY 2021-22, up 27 per cent from Tk 151,209 crore the previous year, according to a paper by Mohammad Yakub Hossain, director of the Microcredit Regulatory Authority (MRA).
Hossain yesterday disclosed these findings during a workshop on the publication of "Microfinance in Bangladesh (Annual Statistics)," organised by the MRA at the Centre on Integrated Rural Development for Asia and the Pacific auditorium in Dhaka.
"Some four crore marginal people have come under the services of 739 MFIs across the country that are licensed by the MRA," he said.
Hossain then said that MFIs collectively disbursed Tk 226,007 crore as loans in fiscal 2021-22 while receiving customer savings to the tune of Tk 85,036 crore at the same time.
Besides, the government's stimulus packages aimed at helping businesses ride out Covid-19 helped the microfinance sector quickly bounce back from the pandemic fallout.
As a result, opportunities have been created for increasing access to the financial sector for marginalised people in the country, he added.
Abdur Rouf Talukder, governor of Bangladesh Bank, urged local microfinance institutes to reduce interest rates on loans for the poor.
"We are charging higher interest from the poorest people, which is not logical, equitable or moral. Instead, the interest rate should be cut significantly for their sake," he added.
At present, microfinance institutes in Bangladesh disburse around Tk 900 crore each day and Tk 2 lakh crore each year.
The interest rate for microfinance loans should be reduced now as the amount of such loans will increase significantly in the days to come, Talukder said.
The central bank governor went on to say that microfinance institutes should take more steps to ensure faster implementation of cashless transactions.
"We want to create a cashless society in the next five years and use mobile phones as both credit cards and banks," said Talukder, also the chairman of the board of directors of the MRA.
"We now have to reduce the use of cash. Binimoy, an interoperable digital transaction platform launched on Sunday, can facilitate transfers among mobile financial service providers," he added.
Sheikh Mohammad Salim Ullah, secretary of the Financial Institutions Division, said microfinance institutes must cut their interest rates, but only if given the opportunity.
Md Fashiullah, executive vice chairman of the MRA, said they started publishing yearly publications containing the overall data of the microcredit sector under the name "Microfinance in Bangladesh (Annual Statistics)" last year.
"Along with microfinance, we have also included information related to microfinance provided by different government bodies, non-government organisations, Grameen Bank and commercial banks," he added.
At the event, Bangladesh Bank Governor Talukder launched four e-services of the MRA to ease the process for providing clients with loan and savings related services.
The e-services are: MRA Info, e-clipping, e-archiving and MRA Library Automation.
Laxman Chandra Debnath, executive director of the MRA, delivered a welcome speech at the event.
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