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Interest rate on micro-credits be fixed in consultation with stakeholders

Staff reporter |
Update: 2010-08-03 22:39:12
Interest rate on micro-credits be fixed in consultation with stakeholders

DHAKA: Bangladesh Bank Governor Dr Atiur Rahman said Wednesday interest rates on micro-credits would be fixed after discussion with the stakeholders, as the NGOs reportedly charge exorbitant interests.

He also called upon the organizations supplying micro-credits to reduce operational costs and transparent management of funds to lessen pressures on the interest rates.

Dr Rahman said this while speaking at a workshop Wednesday on “Effective service charge/interest rates fixation” as chief guest at the CIRDAP auditorium. The governor of the central bank is the ex-officio chairman of the Micro-credit Regulatory Authority.

Mentioning that the interest on micro-credits should be competitive, the governor said in fixing the interest rates, the lowest rate should get priority. “Others should see in detail how one is giving micro-credits at lower rates.”

Replying to a query, Dr Atiur Rahman said, “If necessary, Bangladesh Bank will fix the highest rate of micro-credits.”

Stressing the need for transparency of micro-credit providers, Dr Rahman said they must put the figures of their incomes and expenditures on the websites.

He said their activities will also be “deeply monitored”.

The representatives of micro-credit distributors took part in the workshop presided over by Dr Kazi Kholiquzzaman Ahmad, Chairman of PKSF.

Dr Kholiquzzaman said the number of credit providers is so large that it would be a difficult job to bring them in a line. “But,” he said, “irregularities should be removed for survival of the organizations.”

BDST/ 1830 HRS/AUG 4, 2010

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