Home ›› 24 Jun 2020 ›› World Biz
As the government fears the effects of the coronavirus on local businesses will likely be prolonged, the Microcredit Regulatory Authority (MRA) has directed the NGOs and microcredit institutions not to loan default any small entrepreneur till next September.
The MRA on Tuesday (June 23) issued a notification to the CEOs of all certified microfinance institutions providing a time extension for the instalments of loans.
Another notification that was issued by the MRA on March 22 forbidding to default anyone until June 30 has been extended for another three months in the new notification.
The new notification reads, “Considering the negative impact of the coronavirus on the economy of Bangladesh and the disruption of usual economic activities of microfinance clients, a notification was issued on March 22 to maintain the classification of debts as specified since January till June 30 this year and not to classify otherwise.”
"In other words, no one can be declared a defaulter even if the client does not pay the loan instalments in the abovementioned period. However, if the class quality of a loan improves, the classification can be changed according to the existing rules."
In a bid to minimize the impact of Covid-19 on the business and economic activities of micro-borrowers, it has been decided that the loans, which were classified on January 1 this year, will not be adversely classified until September 30.
Instalments or loans left due till September 30 cannot be shown as arrear or default if the instalments of microloans are unpaid due to financial incapability of the borrowers in the situation caused by coronavirus outbreak. However, if the class quality of a loan improves, it can be classified according to the existing rules.
The notification adds that borrowers cannot be forced by microfinance institutions to pay instalments in this time of crisis. However, there will be no obstacle in accepting loan instalments from clients offering to repay willingly.
Besides, in the interest of keeping the wheel of rural micro-economy in motion, all the concerning sections and people have been directed to follow the health guidelines instructed by the department of health while running various social activities including distribution of loans, withdrawal/return of savings, distribution of emergency relief items, remittance services and payment of salaries to employees.
The directives -- issued as per the powers vested in Section 9 (f) and Section 46 of the Microcredit Regulatory Act, 2006 -- will come into effect immediately, the notification reads.
