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Micro-lending shoots up in Bangladesh

Publication Date : 14-02-2013

 

Microcredit has made major headway under the present government in Bangladesh, with lending increasing 70 percent in the last four years, Prime Minister Sheikh Hasina said on Wednesday.

The total outstanding microcredit stood at 180 billion Bangladeshi taka (US$ 2.2 billion) when her government took office in 2009, and now, the figure is 300 billion Bangladeshi taka.

Traditional banks, whose reluctance to provide small loans to the poor gave birth to the microcredit system, also expanded their financing for small borrowers in that period.

Microloans by banks rose by an astonishing 117 percent to 32 billion Bangladeshi taka, compared to 2008, Hasina said.

The major jump in loan disbursement came despite heavy criticism of microfinance institutions (MFIs) from the government and the ruling party.

Hasina, however, urged all to not exploit the poor in the name of microcredit.

"Our aim is to eradicate poverty - not nurture it. We do not want people to lead disastrous lives due to the burden of loans,” she said. “I request all to ensure that people do not become insolvent on their way to repaying loans.”

“We do not want anyone to take further loans to repay their earlier ones and get caught up in a vicious cycle,” she added.

Hasina's comments came on the 23rd anniversary of Palli Karma-Sahayak Foundation (PKSF) at Dhaka's Sonargaon Hotel.

Initiatives have been taken to further strengthen the PKSF as it has been playing a special role in alleviating poverty and empowering people, Hasina said.

PKSF provides financial assistance to the poor through non-government, semi-government and government organisations, voluntary agencies and societies and local government bodies.

It provides low-cost loans to 268 MFIs that in turn distribute credit among borrowers.

Since its inception in 1990, it has lent US$1.53 billion to partner organisations.

Hasina said some nine million families are directly receiving PKSF's services through the 6,000 branches of its associate organisations across the country.

Planning Minister AK Khandker, Environment and Forests Minister Hasan Mahmud, PKSF Chairman Qazi Kholiquzzaman Ahmad and Managing Director Quazi Mesbahuddin Ahmed also spoke on the occasion.

*US$1=80.3 Bangladeshi taka

 

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