The poorest pay the highest interest for loans: Cenbank governor

The poorest people in the country have to pay the highest interest amounts against loans, says Bangladesh Bank Governor Abdur Rouf Talukder.

"Around Tk900 crore in loans is being disbursed via microcredit every day and we are charging the highest interest rates from the poorest who take these loans," the governor said at a workshop organised by the Microcredit Regulatory Authority (MRA) on Tuesday.

He urged the authorities concerned to think whether charging high interests is ethical or not.

The workshop was held to mark the publication of a report titled "Microfinance in Bangladesh (Annual Statistics)" at the CIRDAP auditorium in Dhaka.

"With the introduction of interoperable digital transaction platform [IDTP] Binimoy, which was launched on Sunday, transactions can now be made among MFSs," he said, adding, "We want to create a cashless society within the next five years. We want mobile phones to become our credit cards and banks."

The central bank governor also said that if cash transactions are reduced in microfinance, transparency will increase. 

After the speech, the central bank chief inaugurated four new e-services – MRA library automation, e-clipping, e-archiving and MRA info.

Financial Institutions Division Secretary Sheikh Mohammad Salim Ullah spoke at the programme as the special guest.

MRA Executive Vice Chairman Md Fasiullah presided over the workshop while Executive Director Laxman Chandra Debnath delivered the welcome speech.

MRA Director Mohammad Yakub Hossain gave a detailed presentation on the content of the workshop.

According to the MRA, since 2004, the publication NGO MFIs has been published first by the Bangladesh Bank and later by the MRA. From last year, the publication titled Microfinance in Bangladesh (Annual Statistics) started publishing comprehensive data on the microfinance sector. It also includes information of MFI (Microfinance Institute), government private organisations, banks, grameen banks, and all reforms related information in the areas of microcredit activities.

The workshop was organised as part of the launch of the second edition of the publication under a new name this year. It was proposed to include departmental and district-wise activity data, separate data for male and female customers, separate provision for loan loss provision (LLP) in cost analysis, etc.

According to the organisation, 739 MRA-accredited Microfinance Institutions (MFIs) are serving around 4 crore marginalised people through around 24,000 branches.

Tk2.26 lakh crore of loans were disbursed to the microfinance sector in the financial year 2020-21 while Tk85,036 crore deposits were collected. Among them, loans and deposits disbursed by MRA certified institutions are Tk1.92 lakh crore and Tk49,624 crore respectively. While credit growth was 9.50% during the Covid-19 affected fiscal year 2020-21, the growth increased to 36.17% in the last fiscal year.