Atiur praises microcredit for its role in poverty cuts

Bangladesh Bank Governor Atiur Rahman yesterday said microcredit played a significant role in poverty alleviation in Bangladesh.
"Microcredit, on the one hand, rids people of poverty, and on the other, plays a positive role in women empowerment," Rahman said.
Bangladesh is recognised globally as the pioneer of microcredit, he said, adding, the concept of microcredit flourished due to its 'light-touch regulations'.
"There is no doubt that microcredit has increased employment for the marginalised people."
Rahman spoke at the opening of the new office building of Microcredit Regulatory Authority, the regulator for microfinance institutions, in the capital.
Poverty rates have come down to 31.5 percent in 2010, from 70 percent in the early 1970s, due mainly to a wider coverage of microcredit in the rural areas, the governor said in a written speech.
He said the number of borrowers, who take loans from Grameen Bank, Bangladesh Rural Development Board and other microfinance operators, reached around 3 crore and these micro-financiers disbursed more than Tk 60,000 crore up to June 30 this year.
The governor said the government aims to give mobile banking services a stronger foundation by creating a link between microfinance institutions and banks to reach the unbanked people in the rural areas.
“We want to bring a momentum in the financial services by providing mobile banking services,” he said.
The central bank has already approved several collaborative initiatives of banks and microcredit providers to give the mobile financial services a formal shape, he added.
He said the central bank has prepared a comprehensive guideline on mobile banking so that banks can provide financial services to the unbanked with the help of cellular phones.
Though the BB has allowed 23 banks to operate mobile financial services, only two -- BRAC and Dutch-Bangla -- have come up with the full-fledged services and registered 20 lakh clients so far.
Commercial banks can now provide farm loans in the rural areas due to the collaborative efforts of the microfinance institutions and banks, said Rahman.
He said banks also made participative relationship with micro-financiers to help send remittances to the rural areas. “The linkage has brought dynamism in the remittance services.”