Microcredit operations will embrace major technological innovations in the next one decade and so the country's Microfinance Institutions (MFIs) should prepare themselves to adapt to this change, says renowned social worker Sir Fazle Hasan Abed.
"After next ten years, the microcredit programmes that we see now would not exist anymore. It will get changed with the integration of new technologies. So, Microfinance Institutions should think about how they can be a part of this new world," he said.
Abed, the founder and chairman of BRAC, the largest non-governmental development organisation in the world, was addressing a publication ceremony of a book written on history of Credit and Development Forum (CDF) styled 'Microcredit: Social Capital and Procedure of Human Development', organised by CDF at BRAC Centre Inn in the capital on Saturday evening.
Deputy Speaker of the 10th Jatiya Sangsad (parliament) Md Fazle Rabbi Miah attended the programme as the chief guest while former governor of Bangladesh Bank (BB) Dr Atiur Rahman spoke on the occasion as the key discussant.
Green University vice-chancellor Prof Dr Md Golam Samdani Fakir, Microcredit Regulatory Authority (MRA) executive vice-chairman Amalendu Mukherjee, Association of Bankers, Bangladesh (ABB) chairman Syed Mahbubur Rahman, Economic Research Group (ERG) executive director Sajjad Zahir, PRIP Trust executive director Aroma Dutta, former CDF chairman Sukhendra Kumar Sarkar and incumbent chairman Md Emranul Haque Chowdhury were also present and spoke.
Talking about future prospect of microcredit, Abed said MFIs in Bangladesh should get prepared by reengineering themselves in line with latest technologies to cope with the future world which will be governed by nothing but technology.
Giving an example, he said a person, who needs a particular amount of loan for emergency reason, will apply for it via a mobile application of a money lender; scrutinising the person's transaction history, the app through its unique algorithm will provide the loan to the person immediately.
"It will be a matter of second to get loans in near future," he said adding person to person communication in disbursing or applying for microcredit or other loans will not be there anymore, the whole process will be done with the help of technology.
Development of such algorithm to scrutinise a client's transaction history is currently going on in the Silicon Valley of California in the US, he informed.
He also said that the banks will play the role of MFIs in future through disbursing microcredit.
Talking about social business and Grameen Bank, Abed praised Muhammad Yunus, saying "He (Yunus) was an international advocate for microfinance and he introduced Bangladesh to the world in a new way by winning the Noble (Peace) Prize."
However, he doesn't talk about microcredit anymore, he lectures on social business now, the BRAC chairman said, asking a question: "How long has Grameen Bank been in social business?"
Abed also mentioned that BRAC has been in social business for a long time with its 17 social enterprises.
Speaking at the programme, former central bank governor Atiur Rahman said it wasn't that easy to popularise microcredit in the country as general people and policymakers took time to understand the importance of such financing.
Citing noted economists Dr Rehman Sobhan and Dr Hossain Zillur Rahman, he said microcredit can't resolve the problem of poverty alone but surely it has brought significant economic changes in the lives of poor people in the country.
Atiur Rahman said the MFIs have actually broken the vicious cycle of money lenders (mohajon) in rural areas and took the step in the country first to empower women.
Talking about linking commercial banks with MFIs, he said it was quite tough to link banks with the MFIs initially, but currently at least 17.50 per cent of total loans disbursed as microcredit was done under the linkage schemes of banks-MFIs.
He also said under such programme, around 400,000 tenant farmer families have been receiving agricultural loans via their bank accounts.
ABB chairman Mahbubur Rahman said Bangladesh is no more a basket case in the world, now it is the 44th largest economy of the globe.
He said microcredit has made considerable contribution in reducing poverty while the level of poverty in the country came down to 22 per cent from 44 per cent in last one decade.
MRA executive vice-chairman Amalendu Mukherjee said that a total of 705 licensed MFIs exist in Bangladesh at present which have distributed Tk 1.30 trillion as credit to millions of people.
Commenting on the book written on the history of CDF, its former chairman Sukhendra Kumar Sarkar mainly focused on the organisation's role as a national microfinance network in Bangladesh, its contribution to the institutional and knowledge-based capacity building of MFIs, sectoral research, networking, advocacy and lobbying, information disseminations, financial sector linkages and organising experience sharing events at home and abroad on microfinance.
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