Take the banks to the countryside
Thursday, 29 November 2007
Grameen and other non-conventional banks operating the countryside report high rates of recovery out of their lendings. Unfortunately, this knowledge could not inspire the country's mainstream banks to spread their business in the rural areas.
With easy access to banking services, the rural areas could grow fast and diversify their economy, with a positive impact on income generation and poverty reduction. The banks would be doing better as well as it would expand their business.
The mainstream commercial banks must be innovative to extend their services to rural areas so that the people there could come out of the poverty trap. This challenge facing the country's banking sector needs to be seen as an opportunity as the success of lending by non government organisations in the countryside shows.
Studies show the rural areas provide substantial deposits to the country's banking system. Mobilisation of deposits in the countryside could be much greater with a bigger presence of the commercial banks there. The commercial banks, as of now have a marginal or non existent role in the countryside creating no or negligible beneficiaries of their loan operations. This inequity contradicts the principle of extending banking services uniformly to all areas of the country. The mainstream banks ought to take greater interest in expanding their services to the countryside in the interest of greater deposit mobilisation and loan operations as well as to promote economic growth and development uniformly throughout the country. It would also make business cense for the banks.
The extension of banking in the countryside by the private commercial banks has assumed greater importance in the backdrop of the recent countrywide closure of many branches of the erstwhile public sector commercial banks as they are undergoing restructuring. Extension of banking services by private commercial banks in areas from where the public sector banks have withdrawn, specially the semi-urban or rural areas, will be much appreciated by the people living there. It should prove to be commercially successful.
Mahfuzullah
Siddeshwari
Dhaka
With easy access to banking services, the rural areas could grow fast and diversify their economy, with a positive impact on income generation and poverty reduction. The banks would be doing better as well as it would expand their business.
The mainstream commercial banks must be innovative to extend their services to rural areas so that the people there could come out of the poverty trap. This challenge facing the country's banking sector needs to be seen as an opportunity as the success of lending by non government organisations in the countryside shows.
Studies show the rural areas provide substantial deposits to the country's banking system. Mobilisation of deposits in the countryside could be much greater with a bigger presence of the commercial banks there. The commercial banks, as of now have a marginal or non existent role in the countryside creating no or negligible beneficiaries of their loan operations. This inequity contradicts the principle of extending banking services uniformly to all areas of the country. The mainstream banks ought to take greater interest in expanding their services to the countryside in the interest of greater deposit mobilisation and loan operations as well as to promote economic growth and development uniformly throughout the country. It would also make business cense for the banks.
The extension of banking in the countryside by the private commercial banks has assumed greater importance in the backdrop of the recent countrywide closure of many branches of the erstwhile public sector commercial banks as they are undergoing restructuring. Extension of banking services by private commercial banks in areas from where the public sector banks have withdrawn, specially the semi-urban or rural areas, will be much appreciated by the people living there. It should prove to be commercially successful.
Mahfuzullah
Siddeshwari
Dhaka