The national forum of microfinance institutions has demanded simplification of the process for disbursing loans from the government’s stimulus packages to help the poor recover Covid-19 losses through productive activities.
Leaders of the Credit and Development Forum (CDF), at a virtual session on Wednesday, said microcredit operators are struggling to survive due to fund shortage and crisis of repayment during the pandemic.
They urged the Bangladesh Bank to offer interest-free or at least low interest capital to small loan distributors and ask the commercial banks to come up with new and smooth loan packages for the people at the grassroots.
“Microcredit has now turned into microfinance contributing a lot to the country’s development. Now, authorities and banks need to be innovative to support the microfinance organisations in carrying out poverty alleviation activities,” Executive Director of CDF Abdul Awal told the conference on ‘Covid-19 impact on Bangladesh Microfinance and MFIs (microfinance institutions)’.
The conference, attended by representatives of around 100 MFIs from Khulna and Barishal regions, called for not reducing the service charge on small loans in view of sustainability unless special support package for overcoming the current crisis is announced.
Zakir Hossain, executive director of Bureau Bangladesh, pointed out that the microfinance sector, which accounts for almost 14 per cent of the gross domestic product (GDP) and involves about 120 million people, has no dearth of relevance to the policymakers.
“CDF and MRI (Microcredit Regulatory Authority) may discuss with financial sector authorities to secure supports including soft loans for distribution among the recipients at affordable cost… Bigger organisations may also help the smaller ones in getting loans,” he added.
Regional General Manager of Sonali Bank, Khulna, Rezaul Karim urged the MFIs to take advantage of the provision for providing working capital and also focus on farm sector micro projects.
In a presentation on impacts of Covid-19 on microcredit programmes, Munowar Reza Khan, Tanvir Rahman Dhali, Tariq Sayeed Harun and Saleh Bin Shams underlined the importance of a sector review and action plan for the post-pandemic period.