The country's microcredit receivers have failed to come out of the vicious cycle of credit due to the profit-mongering attitude of microcredit lenders, Prime Minister Sheikh Hasina said yesterday.

Under such circumstances, the government has launched the 'One House One Farm' project, which was initially undertaken as a pilot project, she said.

The premier spoke after inaugurating 100 branches of Palli Sanchoy Bank (rural savings bank) through a videoconference from her official residence at Gono Bhaban in the capital.

The bank has been created by converting the 'One House, One Farm' project taken by the Department of Rural Development and Cooperatives in 2009 for five years, to make every rural house into an agricultural farm.

Hasina said she used to be an advocate of microcredit, but with the passage of time she had noticed that the microcredit receivers could not take long-term programme as they had to remain busy in repaying their loans.

“As a result, the poor remained poor. They had to sell properties to repay their loans with interests and some even had to commit suicide,” she said.

She said the main objective of the bank was to save poor people from the vicious cycle of the so-called microcredit, which never helped people to come out of the poverty trap. The new branches of the bank will encourage people in making savings and investment, playing role in alleviating poverty and boosting the rural economy, Hasina said.

“It will also create a secured social system for the beneficiaries and for their future generation.” Under the 'One House, One Farm' project, some 2.2 million people, mostly rural poor and underprivileged, were incorporated under around 40,214 committees.

The project encourages people in environment-friendly dairy and poultry farming, horticulture, exchange of ideas, knowledge and technologies, cooperative marketing and savings of earnings.

As per the instruction from Hasina, the bank was formed to give a boost to the 'One House, One Farm' project. Hasina said the barren lands of absentee owners who stay abroad could be associated with the committees and brought under cultivation. She said those absentee owners could also get a share of the profit of their produces.

Referring to the establishment of 100 special economic zones, she said agro-processed and food processing industries would be given preferences in those zones.

A link could be set up where the beneficiaries could sell their produces to the possible industries in those zones as raw materials through the committees, the prime minister said. Finance Minister AMA Muhith and Local Government, Rural Development and Cooperatives Minister Khandker Mosharraf Hossain also spoke.

After the inauguration, Hasina exchanged views with the beneficiaries of the bank's Tungipara, Faridpur Sadar and Sylhet Sadar branches.