Bangladesh Bank (BB) Governor Abdur Rouf Talukder on Tuesday urged the country's microfinance institutions to reduce interest rates on microcredit lending.
"Making profits from the loans disbursed among the poor is unethical and the interest rates should be cut down …," said the BB governor, while addressing as the chief guest a workshop organised by the Microcredit Regulatory Authority (MRA) at the CIRDAP auditorium in Dhaka. The workshop was organised to mark the publication of a report titled 'Microfinance in Bangladesh (Annual Statistics)'.
The poor have been paying higher interests following higher charges by the microcredit institutions, said Mr Talukder.
He said transactions of the microcredit institutions are now over Tk 9.0 billion a day and annually it is now Tk 2.0 trillion.
"If we consider the transactions since the 1990s, the microcredit daily transaction is now huge and the overhead cost should be dropped," he said.
The NGOs had been established to promote the poor, said the central bank governor, adding that there was no alternative but to reduce the rate of interest.
The microfinance institutions should also take more steps for faster implementation of cashless transactions, said Mr Talukder, also chairman of the MRA Board of Directors.
Mentioning that the government wants to create a cashless society in the next five years, the BB governor said most of the people now own mobile phones and this device will act as a credit card, debit card, and money wallet.
"We now have to reduce the use of cash. Binimoy, an interoperable digital transaction platform, was launched on Sunday. With its introduction, transactions can now be made among mobile financial service providers," added Mr Talukder.
At the event, the governor launched four e-services of the MRA to ease the process of providing clients with the loan and savings-related services. The e-services are MRA Info, e-clipping, e-archiving, and MRA Library Automation.
Sheikh Mohammad Salim Ullah, secretary of the financial institutions division, joined the event as a special guest.
Md Fashiullah, executive vice chairman of the MRA, presided over the programme, while MRA Director Mohammad Yakub Hossain presented a keynote at the function.
