Interest rates for microcredit

I would like to differ from their unanimous opinion that the interest rate should be market driven. Let me quote from their analysis. They claimed that BKB or RAKUB are not sufficient in meeting public demand, so the NGOs are coming into agricultural credit. Here lies the truth - rates can only be market driven when there is abundance in demand and supply, and there is competition in the market. In Bangladesh, the demands from the downtrodden people (right of receiving credit) are enormous and the suppliers ( lenders) are doing a sort of monopoly business in their own areas.

Microfinance plays a pivotal role to alleviate poverty and ameliorate the lifestyle of the marginalized people in Bangladesh. Actually, Bangladesh deserves kudos for its micocredit success. Many organisations such as Brac, Grameen Bank, and ASA work in both rural and slum areas.

Microfinance is very fruitful in poverty alleviation, women empowerment and small entrepreneurship. NGOs in Bangladesh can be a model if they are not used as shopping bags of donor agencies. Through the Dhaka summit, the participants could share their experiences and help each other to insert impetus in NGO activities.

The govt should back the NGOs by removing the bureaucratic bottlenecks.

Molla Mohammad Shaheen, Dept of English, Dhaka University