At a recent three-day conference in Bangladesh titled, “Microfinance Regulations: Who Benefits,” the country’s Finance Minister, Mr Abul Maal Abdul Muhith, argued that high interest rates and charges are the main challenges facing Bangladesh’s microfinance industry. He added that many borrowers are falling into a “debt trap,” and that few people are escaping poverty due to microfinance.
Dr Qazi Kholiquzzaman Ahmad, Chairman of Palli Karma-Sahayak Foundation (PKSF), a Bangladeshi microfinance organization, highlighted the importance of establishing microcredit banks instead of nonprofit organizations in order to increase transparency in the sector and protect borrowers.
By Stefanie Rubin, Research Associate
About Palli Karma-Sahayak Foundation (PKSF):
The Palli Karma-Sahayak Foundation (PKSF) was created in 1990 in Bangladesh. It intends to provide assistance with microcredit funding and institutional capacity building for microfinance institutions (MFIs) and non-governmental organizations (NGOs) that provide microcredit loans to poor populations in the country.
Additional Resources:
Source Article: The Daily Star: “High Interest Rates Main Problem of Microfinance: Muhith,” http://www.thedailystar.net/newDesign/latest_news.php?nid=22701
MicroCapital Universe: Palli Karma-Sahayak Foundation (PKSF): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Palli+Karma-Sahayak+Foundation+%28PKSF%29
MICROCAPITAL BRIEF: Mohammed Yunus, Founder of Grameen Bank, Calls for Standardized Interest Rate for Microfinance Institutions (MFIs) and Strict Definition of “Microcredit” in Bangladesh: https://www.microcapital.org/microcapital-brief-mohammed-yunus-founder-of-grameen-bank-calls-for-standardized-interest-rate-for-microfinance-institutions-mfis-and-strict-definition-of-microcredit-in-bangladesh/
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