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12:29 PM
Maruf
The poor or
extreme poor who take micro credit should be also allowed to do so at bearable
or nominal rate of interest. But even the interest rates charged on publicly
run micro credit programmers continue to be rather oppressive for their poor
receives. No great difficulty is see in the way of the government lending to
the poor at much lower rates of interest because the government should not be
in the business of squeezing out under interest from the poor.
Disbursing
credit to the poor to make big financial gains out of the same cannot be the
aim of government which claims to be on
the side of reducing poverty.
The
recommended lower rates of interest on micro credit should meet both the need
of viably running the official micro credit operation while also meeting the
intended objectives of there programmers. The NGO’s in many cases also charge
high interest on micro credits provided by them.
They also
need to be persuade to significantly decrease the interest they charge and
ought to base their credit operations truly for the benefit and advantage of
the poor and not for only making good profits out of such operations. Not with
standing the increase in opportunities for the poor to be the beneficiary of
small credits from institutional sources, the remain still the victims of
private money lenders of “mahajans”(money lenders) also in many cases. Studies on micro credit
showed that mahajan continue to be a big factor in the micro credit scene
exploiting the gaps in institutional
Availability of credits. this indicates the importance of increasing the
networks of institutional credit both by the government and NGO’s .
But such
expansion of networks by them needs to be accompanied also by adequate lowering
of the interest charged on the credits. It is also imperative to introduce laws
and enforce them strictly to curb the activities of mahajans
who in many cases take interest as high as 300% or something near that figure.
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