Loan guarantee issue

FE Team | Published: September 21, 2020 19:40:24

People take personal loan based on trust and a lot of people do business and make transactions accordingly. Thankfully, there are only few cases of breaching trust. That is the strength of Bangladesh society. But, banks and financial institutions despite being modern organisations are also using personal guarantors for distribution of loans.
This issue is being discussed in different circles after some loan recipients failed to repay loans and the guarantors were approached by loan distributors seeking remedy. Reports say many loan recipients make their family members, friends, relatives and colleagues guarantors. Both loan disbursement officials and recipients initially consider it as a mere formality.
Time has come to reconsider the issue of personal loan guarantor for often suffers for signing the loan document in good faith. We think, banks and financial institutions should come up with different mechanism for smarter loan management. The government should also create a window for small loan recipients who fail to repay due to accidents.
Ehsan Babu
Majdair, Narayanganj
ehbabu@gmail.com