PKSF faces fund crunch to finance anti-poverty recipe

The Palli Karma Sahayak Foundation (PKSF) has sought the rescheduling of Tk 12 billion borrowed from the government and development partners to lend to poor people for employment generation, as it faces fund crunch, officials said.
Established in May 1990, the PKSF, which distributes loans through 274 partner organisations (POs), has so far disbursed Tk 237.15 billion for sustainable poverty reduction.
The foundation has presently some 9.0 million borrowers, 91 per cent of them women. So far, the PKSF activities have created some 2.11 million full-time employment opportunities.
Until now, it has returned some Tk 10 billion as principal and Tk 2.06 billion as interest to the government. The foundation has a total of Tk 12.17 billion worth of loan owed to the government.
The PKSF officials in a recent letter to the Ministry of Finance (MoF) said the size of its distributable funds has been squeezing as it was continuously paying back loan and interest to the government.
As a result, the foundation fails to distribute loans according to demand of partner organisations in the field level. Failing to get adequate money from the PKSF, the partner organisations are forced to take loans at high rates of interest from commercial banks.
The PKSF sought financial assistance from the government for continuation of lending to the poor and further extension of the anti-poverty recipe. It also requested the government to reschedule its loan for 40 years instead of present 20-year term.
A senior MoF official told the FE that Finance Minister AMA Muhith has given the go-ahead to the PKSF proposal in view of the importance of the works the development organisation.
"Thereafter, the bank and financial institutions division (BFID) has sought consent of finance division before taking further steps regarding the rescheduling of the PKSF loans," he said.
Officials said the PKSF under its 13 programmes has taken various activities aimed at poverty reduction. It distributes micro-credit for entrepreneurship development, capacity development and employment generation.
It provides financial assistance and institutional development support to appropriate organisations for implementing sustainable inclusive financial programmes for reduction of poverty through creating productive employment opportunities for the moderate and ultra poor, small and marginal farmers and micro-entrepreneurs.
The PKSF also supports, promotes, develops and identifies sustainable employment opportunities for the moderate and ultra poor, small and marginal farmers and micro-entrepreneurs. It provides them assistance in fields like education, health, training and risk-reduction services.
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