Bangladesh Bank Governor Abdur Rouf Talukder on Tuesday said that reduced transactions of cash in microcredit would enhance transparency in the microcredit operations across the country.
"There is a need to reduce transactions of cash in microcredit," the central bank governor said while addressing the launching of the e-service of the Microcredit Regulatory Authority (MRA) at a function in the capital.
Rouf said although non-governmental organisations (NGOs) were established in the country in large numbers to render services, they are charging low-income people with high interests against their microcredit.
Urging all the concerned stakeholders to exit the culture of excessive profit, he said there is no alternative for reducing the interest rate.
Currently, there are some 881 microcredit organisations in the country registered under the MRA. Out of that, some 747 are conducting their operations across the country through some 22,000 branches. The loan recovery rate of the NGOs is more than 98 per cent.
According to official data, more than 3.52 crore families are under the coverage of microcredit operations. If a family consists of four people on average, then around 14 crore people or 75 per cent people of the country are directly or indirectly related to microcredit.
As per the data from the Credit and Development Forum (CDF), around 73 per cent of rural financing comes from microcredit organisations.
Out of the total disbursed microcredit amounts, around 40 per cent goes to agriculture while around 31 per cent goes to the small entrepreneurship sector. The contribution of microcredit to GDP is 14.37 per cent.
