Cyclone-affected Borrowers
Microcredit lenders mull writing off Tk 600cr loans
Courtesy Daily Star 27/11/07
Microcredit providers of the country are considering writing off over Tk 600 crore outstanding loans of some 7.5 lakh borrowers, severely affected by Cyclone Sidr which already took the lives of 1,227 of them.
Although the microcredit providers are not going to make an announcement of the write-off right now, they might finally write the loans off since the small borrowers lost most of their houses, businesses, and other assets.
In 12 south and south-western districts, some Tk 1,159 crore in loan remains outstanding with 15 lakh people, with 42 microcredit organisations operating in the region.
According to the rules of NGO Bureau, the microcredit providers must write off all the loans and interests of the borrowers killed in the disaster.
Sources said 334 borrowers of Grameen Bank, 282 borrowing members of Brac, 333 borrowers of 33 organisations affiliated with Palli Karma-Shahayak Foundation (PKSF), 150 members of ASA, and 120 borrowing members of other small organisations were killed in the cyclone.
Md Sahjahan, general manager of Grameen Bank said they have around Tk 528 crore in outstanding loans in those areas, about fifty percent of which might need to be written off.
"We presume that most of the loans disbursed in the severely affected areas might be very difficult to recover, but we don't want to make the announcement so early."
When asked whether they will continue putting pressure on the borrowers including those who lost all their properties, Sahjahan replied that the bank instructed its field level officers to evaluate the capacities of the affected borrowers.
Deputy Executive Director of Brac Moshtaq Reza Chowdhury said they will write off half of their loans of Tk 350 crore in the southern region within the next one year.
"But if we make an official public announcement then even those who have the capacity to repay the loans will also try to get out of it," Reza said.
All microcredit providers decided to suspend collection of repayment instalments from severely affected borrowers.
They will also come up with fresh lending schemes and rehabilitation programmes for all cyclone affected areas.
GRAMEEN BANK
The leading microcredit provider, Grameen Bank, claimed that 334 of its borrowers, and 853 family members of borrowers were killed in the cyclone, while 1,898 of their family members are still missing in six districts of the affected region.
"The number of death is increasing every moment. We are getting information that missing members are being included on the list of the dead every day," Hossain Ali, deputy general manager of Grameen Bank, said.
He said the bank has an amount of over Tk 528 crore in outstanding loans with 10.49 lakh borrowers affiliated with 409 of its branches in six districts.
Houses and other properties of 4,99,185 borrowers were completely destroyed, while houses and properties of 2,31,869 borrowers were damaged partially.
The number of Grameen Bank branches that were destroyed completely in the cyclone stands at 274 while 98 of its branches were damaged partially.
The bank management suspended collection of loan repayment instalments until June 30, 2008.
The bank will launch a vigorous rehabilitation work as it plans to provide fresh fund of Tk 100 crore for reconstructing the houses of its affected members.
BRAC
Another leading microcredit provider Brac claimed that it has over Tk 350 crore in outstanding loans with borrowers affiliated with 344 of its branches in 72 upazilas of the 12 cyclone affected districts.
Brac's founding Chairman Fazle Hasan Abed in an interview with a vernacular daily on Saturday said they will need to write off around Tk 150 crore out of Tk 300 crore of loans that had been disbursed in the region.
Moshtaq Reza Chowdhury, who is also the coordinator of disaster coordination cell of Brac, the world's largest non-government organisation (NGO), yesterday said houses and properties of 74,662 Brac members were completely destroyed while 1,40,605 houses of its members were partially damaged.
He said the total number of family members of borrowers, killed in the cyclone, is yet to be determined.
Brac allocated 1,500 tons of rice as relief for the cyclone affected areas and will start a cash for work programme to rehabilitate the survivors.
PKSF
PKSF has around Tk 141 crore in outstanding loans disbursed through its 33 affiliated organisations among the cyclone affected people. PKSF Cyclone Coordination Cell Officer Saleh Bin Shams said houses and properties of 1.10 lakh of its members were completely destroyed while another 1.5 lakh houses and other properties of its members were partially damaged.
PKSF affiliated organisations claimed that their borrowing members lost Tk 330 crore in the cyclone.
PKSF asked its affiliates to keep their repayment instalment collection suspended for a month and to write off the loans on case to case basis.
ASA
President of ASA Md Shafiqual Haque Choudhury said they will write off loans and interest of 50,000 of their members.
He said 50 to 60 thousand of their borrowers in four districts of the region suffered 99 percent damage of properties while another one lakh of their members are suffering from partial loss of properties.
TMSS
Executive Director Hosne Ara Begum of Thengamara Mohila Sabuj Sangha (TMSS), a sister organisation of PKSF, said her organisation suspended collecting loan repayment instalments in cyclone effected areas until further notice.
She said TMSS sought Tk 4 crore from PKSF to launch a rehabilitation programme.
PKSF sources said around 15 small scale organisations also have microcredit networks in the southern region, working independently.
Executive Director of the Development Initiative at Coastal Region (DICR) Habibur Rahman said they disbursed around Tk 50 lakh in Barguna and Pataskala districts, and around 35 borrowers of the organisation were killed in the cyclone
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