Friday, 2 December, 2022

Reduction in transactions of cash in microcredit to enhance transparency: Governor

Bangladesh Bank Governor Abdur Rouf Talukder today said that reduced transactions of cash in microcredit would enhance transparency in the microcredit operations across the country.

The central bank governor said this while addressing the launching of e-service of the Microcredit Regulatory Authority (MRA) at a function in the capital today.

Rouf said although the NGO were established in the country in large numbers to render services, but they are taking high charges while the poor communities are also giving high interests against their microcredit. "There is a need to reduce transactions of cash in microcredit."

Urging all the concerned stakeholders to come out from the culture of excessive profit, he said there is no alternative for reducing the interest rate.

Currently, there are some 881 microcredit organizations in the country registered under the MRA. Out of that, some 747 are conducting their operations across the country through some 22,000 branches. The loan realization rate of the NGOs is more than 98 percent.

According to official data, more than 3.52 crore families are under the coverage of microcredit operations while if a family consists of four people on average, then around 14 crore people or 75 percent people of the country are directly or indirectly related to microcredit.

As per the data from the Credit and Development Forum (CDF), around 73 percent of the rural financing comes from the microcredit organizations.
Out of the total disbursed microcredit amounts, around 40 percent goes to agriculture while around 31 percent goes to small entrepreneurship sector. The contribution of microcredit in GDP is 14.37 percent.