The country's microfinance institutions, or MFIs, have sought Tk 225 billion refinancing fund as stimulus package to overcome the economic losses from the coronavirus pandemic.
Credit and Development Forum, or CDF, a national grouping of the MFIs, has sent letters to government high-ups, including Prime Minister's Office, Bangladesh Bank governor, Microcredit Regulatory Authority, the Finance Ministry, and the NGO Affairs Bureau, pleading for the rescue package.
The agencies sought the fund for a period of five years and at 9.0 per cent rate of interest, of which the small lenders would pay 4.5 per cent and the central bank would pay the rest on behalf of the government, according to the letter obtained by the FE.
The loan should be collateral-free and the application of fund should be settled within 15 days, said the letter.
"The amount of fund we asked for is 15 per cent of our annual disbursement, if we get the fund the MFIs will be able to recover the losses," chairman of the forum Murshed Alam Sarker told the FE.
On April 20, the Bangladesh Bank unveiled a financial package of Tk 30 billion for underprivileged farmers, professionals and micro enterprises to help them offset the negative impact of the virus.
Marginal businesses and farmers with no access to banks and non-bank financial institutions will be allowed to get the loans from the revolving fund at 9.0 per cent interest rate.
The MFIs) with certificates from the Microcredit Regulatory Authority can give out the loans.
Under the package, the BB will initially provide the fund to banks at 1.0 per cent interest, which they will lend to the MFIs at 3.5 per cent interest.
The MFIs will be allowed to charge a maximum of 9.0 per cent interest on borrowers.
CDF chairman said this is a great initiative from the government, which will help meet the immediate needs of the MFIs and their clients.
But "we require stimulus fund for the long-term recovery of the sector," he said.
Among other benefits MFIs sought, two years time for the repayment of loan they took out from March to June 2020 and interest waiver for the loan of the period.
The MFIs also want postponement of 0.15 per cent charges by the regulator on the annual income on the micro-lenders.
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