Traditional private financial bodies 'hardly pro-poor'

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FE Report
Renowned economist Wahiduddin Mahmud Monday said the traditional private financial institutions, which operate credits and deposits in free market economy, are hardly pro-poor.
Professor Mahmud, a former adviser of caretaker government, said only social institutions like cooperatives could operate credit and deposit programmes to achieve pro-poor, reliable and sustainable development.
"Social institutions like cooperative credit societies and unions are pro-poor organisations and very much potential in operating reliable and sustainable credit and deposit activities," said the economist.
He was speaking at a function marking the inauguration of the week-long annual forum of the Association of Asian Confederation of Credit Unions (AACCU) on Monday in the city.
Mahmud said the ongoing crisis in global financial markets once again shows that free market economy is cruel, harsh and amoral.
The former adviser of caretaker government cited the instance of leasing of government-owned lands to shrimp cultivators and regretted that in Bangladesh big and private businesses occupied potential resources which could be offered to cooperatives of the poor.
He, however, urged leaders of cooperative unions to explore diversified areas in Bangladesh for supporting poor people with soft finance in self-help ventures.
Support programmes for the coastal area fishermen, who are deprived and bonded for generations by the traditional lenders, could be a good operation field, he suggested.
Kaisarul Alam, additional secretary and registrar of the department of cooperatives, said the government would provide every possible help to cooperatives.
In a presentation the registrar pointed out that politicisation, lack of appropriate policy support or policy shift hindered the growth of efficient cooperatives in Bangladesh.
He also said poor governance, inadequate education and lack of professionalism are factors responsible for the sorry state of cooperatives in Bangladesh.
Ranjit Hettiarachchi, CEO of the AACCU, said the forum would give a fresh look into the strategies enabling credit unions to present better choices.
The AACCU organised the major cooperative event attended by 400 delegates including 220 from 21 countries.
The theme of the forum this year is "Credit Union Growing to New Heights-Better Choices, Better Organisation and Better Community."
Benedict Bayaua, secretary general of APRACA, Thailand spoke in the inaugural ceremony.
AACCU has affiliated more than 16,000 credit unions with 20.5 million individual members in 26 countries and deals with assets and deposits worth $60 billion.