NGO and rights activists in city yesterday demanded loan at a single digit interest rate in the agricultural sector to facilitate their programs aimed at developing the country’s agriculture.
The demand came from a press conference jointly organized by CDF (Credit and Development Forum), INAFI-Bangladesh (International Network for Alternative Financial Institution) and COAST Trust at the National Press Club in the capital.
CDF executive director Abdul Awal, Syed Tareque Harun of COAST Trust, executive director of INAFI- Bangladesh Atiqun Nabi, executive director of COAST Rezaul Karim Chowdhury and Mostafa Kamal Akhanda of COAST, among others, spoke at the press conference.
Tarik Syed Harun said the NGOs and MFIs (microfinance institutions) have successfully provided collateral-free loans in agriculture, fishery and livestock covering 207 million borrowers amounting to Tk 400 billion in 2011.
But, the NGOs and MFIs now have been suffering from capital crisis while the commercial banks have idle money of nearly Tk 72,000 crore, he said.
Harun said NGOs and MFIs borrow money from commercial banks at up to 16 percent interests with many hidden costs. It is demoralizing them to maintain the high interest rate to cover the loan disbursement to the beneficiaries and its operational cost.
The contribution of the bank loans in 2008 to the entire fund composition of the NGOs and MFIs was 19.13 percent, but it reduced to 12.84 percent by four years due to the high interest.
Although the contribution of agriculture to GDP has reduced, still it provides 49 percent of employment in Bangladesh, he said.
Abdul Awal said the banks providing credit to the NGOs and MFIs must be collateral free as they have been giving this loan to the poor collateral free.
Atiqun Nabi said idle money in the Banking sector, in fact, is the public money, so it should be utilised for the greater interest of the people.
Rezaul Karim Chowdury said Bangladesh should consider the lower interest rate in agricultural loan to face the future challenge of climate change and attain self sufficiency in food.
He stressed reinvesting the idle money of bank in the agriculture sector through the NGOs and MFIs as they are closely working with small farmers of the country.