Microcredit lenders asked to fix interest rates rationally
Tuesday, 22 December 2009
FE Report
The government is trying to make the microcredit sector more disciplined by ensuring transparency and accountability in determining interest rate, said Bangladesh Bank Governor Dr Atiur Rahman on Monday.
The microcredit financial institutions (MFI) should fix the interest rates at a reasonable level through transparent process, he said at the launching ceremony of the MIS and office automation system of Microcredit Regulatory Authority (MRA).
"Introduction of information technology in the MFI report making process is one way of doing it," he said.
There may be a debate on the impact of microcredit at the macro level but it is certain that employment opportunities have increased through microcredit operation, he said.
Managing Director of Palli Karma Sahayak Foundation (PKSF) Dr Quazi Mesbahuddin Ahmed said there is a negative perception about interest rates charged by the MFIs.
"It is not desirable and the MFI should declare the effective interest rates," he said.
The MFIs should announce the interest rates of different lending products in a transparent manner, he added.
The automation in the MRA will help ensure transparency in the sector, the chief of the PKSF hoped.
"About 25 per cent of the total microcredit is disbursed through partner organisations of PKSF," he said.
The PKSF has 225 to 250 partner organisations through which it disburses loans to poor people.
MRA executive vice-chairman Khandkar Muzharul Haque said MFIs have established themselves as an alternative to the banking system.
"The MRA should ensure that people are not cheated but get financial products at fair prices," he said.
The new automation system will help the MRA to become more efficient, he added.
"Data analysis and preservation will be more efficient after the introduction of the database system," Mr Muzhar said.
UK-based Department for International Development (DFID) has financed the automation project and Datasoft was the vendor.
The government is trying to make the microcredit sector more disciplined by ensuring transparency and accountability in determining interest rate, said Bangladesh Bank Governor Dr Atiur Rahman on Monday.
The microcredit financial institutions (MFI) should fix the interest rates at a reasonable level through transparent process, he said at the launching ceremony of the MIS and office automation system of Microcredit Regulatory Authority (MRA).
"Introduction of information technology in the MFI report making process is one way of doing it," he said.
There may be a debate on the impact of microcredit at the macro level but it is certain that employment opportunities have increased through microcredit operation, he said.
Managing Director of Palli Karma Sahayak Foundation (PKSF) Dr Quazi Mesbahuddin Ahmed said there is a negative perception about interest rates charged by the MFIs.
"It is not desirable and the MFI should declare the effective interest rates," he said.
The MFIs should announce the interest rates of different lending products in a transparent manner, he added.
The automation in the MRA will help ensure transparency in the sector, the chief of the PKSF hoped.
"About 25 per cent of the total microcredit is disbursed through partner organisations of PKSF," he said.
The PKSF has 225 to 250 partner organisations through which it disburses loans to poor people.
MRA executive vice-chairman Khandkar Muzharul Haque said MFIs have established themselves as an alternative to the banking system.
"The MRA should ensure that people are not cheated but get financial products at fair prices," he said.
The new automation system will help the MRA to become more efficient, he added.
"Data analysis and preservation will be more efficient after the introduction of the database system," Mr Muzhar said.
UK-based Department for International Development (DFID) has financed the automation project and Datasoft was the vendor.