Dhaka: Claiming that microcredit represents the “real banking”, Chief Adviser Professor Muhammad Yunus today emphasized the establishment of a ‘Microcredit Bank’ aiming to foster entrepreneurship by providing collateral-free small credit to young individuals.
According to Bangladesh Sangbad Sangstha, Professor Yunus made these remarks while inaugurating the Microcredit Regulatory Authority (MRA) building in Dhaka’s Agargaon area. He highlighted the need to transition microcredit from its current status as a Non-Governmental Organization (NGO) to a formal banking institution, stating that microcredit has evolved to a point where a new approach is necessary.
Present at the event were Finance Adviser Salehuddin Ahmed, Chief Adviser’s Special Assistant Dr. Anisuzzaman Chowdhury, Bangladesh Bank Governor Ahsan H Mansur, Financial Institution Division Secretary Nazma Mobarek, and Microcredit Regulatory Authority Executive Vice Chairman Prof Mohammed Helal Uddin. Prof Yunus, recognized as the founder of microcredit, proposed drafting a new ‘Microcredit Bank Act’ to facilitate the establishment of this bank.
Addressing the limitations currently faced by microcredit organizations, Prof Yunus noted that while they can accept savings from members, they cannot accept deposits from the general public. He emphasized the importance of establishing a Microcredit Bank, which should operate as a social business bank rather than a conventional one. He insisted that the law should ensure that the owners of the Microcredit Bank do not profit from it, but rather, the loan receivers should be the ones to gain financial benefits.
Prof Yunus reiterated the foundational principle of Grameen Bank, which views every human being as an entrepreneur. He emphasized that young people should have access to collateral-free loans from the Microcredit Bank to invest and become entrepreneurs, reducing the need for job-seeking.
Underscoring the government’s role, he stated that it is their responsibility to establish institutions that support the youth. Prof Yunus also highlighted the journey of Grameen Bank, contrasting it with conventional banks that require guarantees for credit disbursement. Grameen Bank, on the other hand, provides credit based on trust in its borrowers.
He pointed out past instances where public funds were mishandled by conventional banks, asserting that Grameen Bank has maintained transparency in its operations. Prof Yunus concluded by affirming that microcredit exemplifies real banking and urged people to engage with it. He praised the Microcredit Regulatory Authority for setting a precedent in transparency through its historical responsibilities.