Microcredit organisations stressed the need for taking up rehabilitation programme in collaboration with the microfinance institutes (MFIs) for the borrowers of the flood-hit districts saying it is more necessary than rescheduling of the loans.
They also demanded funds from the government on easy terms as the MFIs have been suffering from fund crunch due to small savings by the flood affected borrowers.
Microcredit Regulatory Authority (MRA) on September 08 last directed micro- lenders not to collect the loan installments for at least two months from the victims of the 17 flood-hit districts, hand out fresh loans to the flood victims and reschedule their current loans.
The microcredit providers were also asked to inform the MRA within October 31 about the steps taken after the directives.
The MRA circular said the homes, farms and crops of thousands of poor microcredit borrowers have been affected by the recent floods, shrinking the income of the victims.
The 17 flood- affected districts are-- Kurigram, Nilphamari, Lalmonirhat, Gaibandha, Rangpur, Bogra, Sirajganj, Tangail, Jamalpur, Dhaka, Manikganj, Munshiganj, Faridpur, Rajbari, Netrakona, Sylhet and Sunamganj.
Credit Development Forum (CDF) chairman Abdul Awal told the FE Thursday that many of the microcredit borrowers have refused the offer of loan rescheduling saying it might increase their loan burden later. Rather the borrowers of both microcredit and micro- enterprise loans demanded increased amount of loan by which they can restart their income generating activities, he added.
He said the government should help the MFIs and provide funds at easy terms to those organisations that are now helping the flood victims.
"When there is flood, the borrowers cannot come to deposit their savings to the MFIs ultimately leading to low credit flow. The government should come forward with funds to avoid the situation," Mr Awal said.
He said there must be some kinds of post- flood rehabilitation programmes of the government, especially in agriculture where MFIs can be involved to make the programmes more effective.
When asked about such response from the micro-credit borrowers, Microcredit Regulatory Authority (MRA) director Sajjad Hossain said he was not informed about such response and the rescheduling facility should be applicable for the real victims only who need it.
"If any client refuses to reschedule his loan, the MFIs should not impose it. Rather it is a positive sign in the context of Bangladesh if microcredit borrowers can repay their loans even during floods," he said.
Mr Sajjad said MRA took the decision of rescheduling the loans after discussions with big MFIs like Brac, Asha and TMSS to review their steps during the flood. It was found that microcredit borrowers mostly fail to repay installments during this time which led to issuance of the circular.
He, however, said there were no steps on the part of the government to rehabilitate the flood victim borrowers while MFIs have been working on some cases.
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