Editorial
Cash-strapped Sidr victims
NGOs should reinvigorate their lending operations
Reports from Patuakhali suggest that with suspension of disbursement of fresh loans by the NGOs, Sidr affected people are falling prey to the hands of money lenders known as 'mahajans'. Small scale entrepreneurs are borrowing money from traditional lenders at interest rates as high as 15 to 20 percent a month. Most of these borrowers are engaged in poultry, fish and vegetable farming and owning shops. With the coming of the NGO micro-credit operations, the mahajans were on the retreat. In current circumstances, however, money lenders are apparently coming to resurface by exploiting pauperisation in the affected areas. Clearly such a state of affairs cannot be allowed to continue.
NGOs in Bangladesh for long have been famously known both within and outside the country for their micro credit operations in alleviating poverty. Therefore it is they who have to come up with innovative ways of providing fresh loans in addition to what they have already done suspending current loan repayment installments. All they have to do is to simultaneously cut on their operational costs and at the same time call upon their regular donors for additional funding including revising the ongoing project funding.
The prime objective behind micro credit operations of such NGOs like Brac, Grameen Bank, Asa and Uddipon is to provide affordable lending option to the poor free from the tyranny of the mahajans whose interest charges are too high. We are looking forward to the NGOs coming in a big way to reinvigorate their micro-credit operations with the resumption of disbursement of fresh loans on a wider scale.
Finally, it has to be realised that NGOs alone can not cope with the complexities of resumption of fresh loans to the small scale entrepreneurs in the Sidr-hit areas, in addition to their obligations to the rest of the country, despite the fact that they happen to be the most experienced and qualified for the job.
Both commercial banks and specialised financial institutions may come forward in providing loans on easy terms without statutory conditions like matching collaterals.
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