Atiur says regulations on cards for the financiers
Microcredit Regulatory Authority (MRA) will soon frame regulations specifying the interest rates the country’s hundreds of micro-finance organisations will be able to charge, its chairman Atiur Rahman said yesterday.
“Bangladesh is the only country with a regulatory authority to regulate the sector and there is scope for improvement,” said Rahman while addressing a group of businessmen in the city.
He said: “We are now looking at the operation modes of the microcredit organisations. Very soon, we will have regulations on how much interests they should charge.”
The comments from Rahman, also the central bank governor, came amid growing debate about the country’s micro-finance organisations charging exorbitant interests from the borrowers.
The BB boss was speaking at the monthly luncheon meeting of France Bangladesh Chamber of Commerce and Industry at Dhaka Sheraton Hotel.
Rahman told The Daily Star that the government has formed a committee headed by Qazi Kholiquzzaman Ahmad, an economist, to recommend the interest rates for the organisations.
The committee is expected to submit recommendations in the next one or two weeks.
“I have also given my input and the committee has almost reached a conclusion,” he said.
“The interest rates vary from institutions to institutions so we are going to put a cap on the maximum limit as we have done for the banks.”
Syed Shah Kamal, the chamber president, presided over the meeting. Humayun Rashid, vice president of the chamber, and Eric Blanc, trade commissioner of economic department of French embassy in Dhaka, also spoke.
Rahman at the meeting said the positive achievements of the country should be highlighted and projected to help brighten its image abroad.
“Compared to the neighbouring East Asian countries, we have achieved remarkable returns despite low investment. Reputed international rating agencies have accorded Bangladesh very good credit ratings,” he said.
“In the last 39 years, our per capita income has increased fourfold and poverty rate halved; the nation is now moving in the right direction to achieve most of the millennium development goals.”
Rahman said the country will become a middle-income one within the next three years. The rest development criteria will gradually be met in the next 10 to 12 years, he added.
The central bank chief said energy crisis and weak infrastructure are dampening the growth prospect, but those problems will be addressed soon.
“We can ensure a 7 percent growth in the urban areas, but we need to reach out to our farmers and small and medium entrepreneurs.”
He said time has come to make the public private partnership (PPP) initiative a reality, as the process has got stalled now. “We have taken sufficient preparation for it.”
The governor also called for enhancing tax collection by bringing in more taxpayers under the net, as the country’s tax-gross domestic product (GDP) ratio is one of the lowest in the region.
He urged the government to be cautious about allocating land for industrial purposes. “Companies are buying hundreds of acres of land and they are not using those. We need to come up with strict zoning.”
The country has to stomach a bit of inflation to achieve desired economic growth, he said. “We are watchful about not letting inflation go beyond control. The half yearly monetary policy of Bangladesh Bank will anchor inflation expectation of economic agents and general public.”
Replying to a question, Rahman said the central bank is not in a mood now to permit the local investors to invest abroad.
On the ‘double-digit’ bank interest rates, he said Bangladesh Bank cannot force the banks to lower the interest rates.
