Dhaka, Bangladesh (BBN)- The micro-credit regulatory authority (MRA) will set the interest rate ceiling on lending for micro-finance institutions (MFIs) to protect the interest of the country’s thousands of small borrowers.
“We’ll take final decision in this connection immediately after concluding discussion with stakeholders including borrowers,” MRA Chairman and Bangladesh Bank (BB) Atiur Rahman said.
The MRA will reward if if micro-finance institutions lower interests on micro-loans, Mr.Rahman said while speaking at a workshop on fixation of charges and interest rates for MFIs, held in CIRDAP Auditorium on Wednesday.
“Each MFI will have to comply with the rules and regulations and be disclosed their financial disclosures regularly,” the BB governor said, adding: “We’ll be very frank but very much firm.”
“We’re now working to announce the interest rate policy within the next three months,” a senior MRA official told BBN in Dhaka, adding that the policy will also be included the grace period of the loan and the number of weeks for recovering such credit.
Chairman of Palli Karma-Sahayak Foundation (PKSF) Qazi Kholiquzzaman
Ahmad said the issue will be discussed further before taking final decision in this regard.
Chairman of the Bangladesh Krishi Bank (BKB) Khondkar Ibrahim Khaled said all non-government organizations (NGOs) should act as facilitators not oppressors.
The government earlier formed the eight-member Micro-credit Regulatory Authority, headed by the BB governor, to issue licences for all private micro-finance institutions in the country.
The act was passed in parliament in early 2006 to bring all operating micro-finance institutions under a regulatory body for ensuring their transparency and accountability.
BBN/SSR/SI/AD-05Aug10-9:51 am (BST)