Muhith praises Yunus for ending default culture

Finance Minister AMA Muhith yesterday praised Nobel laureate Prof Muhammad Yunus for pioneering a culture free of loan defaults in the microcredit sector.

"Microcredit borrowers in Bangladesh have proved that they are trustworthy, take loans and return loans in time," Muhith said.

"For freeing us from the default culture, I think, the nation is really grateful to Prof Poverty Alleviation and Social Development: The Role of MFIs” at Bangabandhu International Conference Centre in the capital.

Yunus launched the Grameen Bank project in order to provide loans to the poor women who had been left out by the traditional banking system, Muhith said.  "At the same time, the programme was aimed at removing the culture of defaults." 

Default loans in the banking sector stand at 11 percent whereas the rate of such loans in the microcredit sector is below 1 percent, the minister said. "The sector has not been affected by the bad influence of loan-default culture.”

Microcredit is an important part of the current monetised economy and will remain so in future.

"Microcredit will exist in Bangladesh even after we eradicate poverty by 2021," Muhith said, reiterating the government's target of bringing down the poverty rate to 14 percent in the next seven years from 26 percent now.