[mukto-mona] FW: Micro finance Institution Funding: BB Governor Contradicts WB Observation --Asia Post editorial dated 20.11.09

 

 

Micro finance Institution  Funding: BB Governor Contradicts
WB Observation
 

Bangladesh Bank Governor Atiur Rhaman on Tuesday expressed dismay over a World Bank observation regarding banking sector’s partnership with the microfinance institutions, according to report in local press. In a recent stocktaking, the World Bank observed that channeling money from the banks to farm loan projects through the microfinance institutions was risky.  ‘It [WB observation] is very much theoretical,’ the central bank chief said while addressing a ceremony to deliver Tk 150 crore syndicated loan to Buro Bangladesh, a leading MFI. Indicating the authorities of the public and private sector commercial banks, who have responded well to the central bank’s new policy of encouraging disbursement of farm loans through MFIs, the BB chief said, ‘They [bankers here] understand things very well; they are not breast-fed babies.’  Atiur Rahman recalled that the World Bank used to say that financing agriculture was not so necessary, but recent food crisis proved such policy to be suicidal.  ‘We have to help farmers, encourage agriculture financing as all bankers saw how the high food prices caused sufferings to citizens, politicians and everyone,’ he said. The BB chief advised the bankers to think how to disburse loans easily to sharecroppers as, he pointed out, they grow major portion of crops despite they do not own lands. ‘We are in a mission to make farm loans available to all farmers and our next mission will be to expedite SME loans,’ Atiur said.  The governor requested the commercial bankers to from syndicated funds and search partners for effective disbursement of SME loans in the rural areas.

We agree that financing agriculture through micro-finance institution is nothing wrong.The MFIs have long reach in the rural areas more than rural branches of general banks or even Krishi ( agricultural ) Banks However micro-finance was supposed to be low cost and as such central bank should give the commercial banks finance without charging interest. We know the commercial banks will  recover their cost of operations, same will be done by MFIs. This is all the more reason why central bank should give cost free fund. It is also suggested Islamic financial mode because it has been proved to be more efficient and  less costly .

---

 

 

__._,_.___

****************************************************
Mukto Mona plans for a Grand Darwin Day Celebration: 
Call For Articles:

http://mukto-mona.com/wordpress/?p=68

http://mukto-mona.com/banga_blog/?p=585

****************************************************

VISIT MUKTO-MONA WEB-SITE : http://www.mukto-mona.com/

****************************************************

"I disapprove of what you say, but I will defend to the death your right to say it".
               -Beatrice Hall [pseudonym: S.G. Tallentyre], 190

Your email settings: Individual Email|Traditional
Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch to Fully Featured
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe

__,_._,___