Financial sector experts have suggested that banks and MFIs together would pave a better way to achieve the goal of financial inclusion in Bangladesh.
Speakers expressed their opinion at a Brac Bank-organised webinar on the "Impact of the Covid-19 pandemic on the microfinance industry" recently, said a press release.
Dr. Qazi Kholiquzzaman Ahmad, Chairman of Palli Karma-Sahayak Foundation(PKSF), and Md. Fashiullah, Executive Vice Chairman of the Microcredit Regulatory Authority (MRA), joined the discussion as honorable guests.
Murshed Alam Sarker, Executive Director of People's Oriented Program Implementation (POPI) and Chairman of CDF; Dr. Humaira Islam, PhD, Executive Director of Shakti Foundation for Disadvantage Women; Selim RF Hussain, Managing Director and CEO of BRAC Bank; and Syed Abdul Momen, Deputy Managing Director and Head of SME Banking of BRAC Bank; also participated in the webinar as panel speakers.
The speakers discussed the effect of COVID on the MFI industry, and also shaded lights on the challenges, and ways forward to ensure the sustainability of this sector. They all recommended that banks and MFIs should aim for more collaborations to elevate financial inclusion.
Humaira Islam, said, "Banks, as one of the prime sources of financing, should also consider the bottom of the pyramid of the MFI sector and create partnerships to help them recover from this situation". She also said, "Regulatory authorities should redesign the pre-pandemic parameters to evaluate the MFIs, and guide them to maintain an efficient balance sheet."
Murshed Alam Sarker said, "MFI ensures financial access for those whom banks can't reach. MFIs are the bank of the extremely poor; hence they should be included under emergency services during challenging times such as a lockdown."
Selim RF Hussain said, "We would also emphasize a partnership between the banking and MFI sector. I'm happy to inform you that BRAC Bank is the largest collateral-free financier in the country, and around 52 percent of our customers belong to the small and medium sector. We are already working with some MFIs of various sizes and we will be happy to extend our collaborations.”
Dr Qazi Kholiquzzaman Ahmad emphasized that SMEs and CMEs should be differentiated and not grouped under CMSME as their needs and models are different. He said, "Our regulatory authorities have to be realistic to be able to move in the right direction in policymaking. MFIs are the only institutions that can reach the small family economies. Development does not refer to economic development only; capacity development is also a big part of development.”
The webinar was broadcast live on the BRAC Bank Facebook page.