The New Nation - Internet Edition

Syful Islam

Bangladesh's Micro Finance Institutions (MFIs) could repress poor people due to lack of government regulations on them, observed Dr Jayanta Chowdhury, Secretary, Association for Research on People and Nature, India.

"The situation in India is totally different. There is no single case of seizing properties of borrower by the lender in India. It is impossible there as the government has control on the MFIs," he said while talking to The New Nation yesterday. Dr Jayanta Chowdhury, also Senior Lecturer (Rural Development) and Coordinator of Centre for Rural Studies of Tripura University, was visiting Bangladesh recently on an international exposure visit on micro finance where different bankers and micro credit officials attended.

Jayanta said none of the MFI's in India can charge more than 12.5 per cent to the borrowers which Bangladeshi NGO's charging more than 30 per cent.

He said in India nearly 20 government departments are working on micro finance. Therefore, state-owned MFIs provide loan to the poor borrowers, he said.

Local government institutions in India are very much strong. The Panchayati Raj Institution (PRI) has been functioning there with the objective to implement Community Development Programmes introduced in the country and to accelerate the pace of development in rural areas involving people's participation. The three-tire Panchayet is playing a vital role so that none of the NGO's can deceive the poor people.

In India the National Bank for Agriculture and Rural Development (NABARD) is facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts. It is also supporting all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas.

Jayanta said, as the response from Bangladeshi Banks to the micro finance is very poor the MFIs are getting the opportunity to take toll on the borrowers. The poor borrowers have no alternative but to go to the MFIs and pay high interest, he said.

"Bangladeshi banks should come forward to lend people collateral free to break the monopoly of the NGO's," he said adding, "The government should establish control over the MFIs to save people from deceiving."