DHAKA, Dec 24, 2017 (BSS) – As a Muslim majority country, Bangladesh can take Zakat and Waqf based microfinance models in fighting hardcore poverty, experts observed at a discussion here yesterday.
“Bangladesh should ensure the ethical microfinance to remove hardcore poverty. Developed countries, including European countries, also consider the ethical issues in any financing,” said Bangladesh Institute of Bank Management (BIBM) Director General Dr Toufic Ahmed Choudhury while chairing a session of a three-day conference at Institute of Diploma Engineers, Bangladesh (IDEB) in the city.
Bangladesh Economic Association organised the three-day 20th Biennial Conference. Bangladesh Bank Deputy Director M Nur-E-Alom Siddique presented a research paper at the session.
Siddique said if microfinance programs can include the hardcore poor through charity based models successfully, microfinance may prove itself as a proper model of ethical finance that can benefit all types of poor and thereby promote inclusive finance and growth.
He explained that ethical finance means inclusive financial system that promotes welfare of all members of the community, poor people in particular. Microfinance has been established itself as an ethical type of finance due to its pro-poor program, he added.
Siddique said the hardcore poor need supports beyond subsidized funds which includes food relief, training and health facilities.
“Already Grameen Bank and large micro finance institutes (MFIs) have undertaken special programs to address the problems of hardcore poor,” he added.
He observed that each large MFI can be given the lead role in economically backward areas avoiding overlapping.
“The government support must also be continued for hardcore poor through enhanced investments in physical and social infrastructures under different government ministries or departments, and social safety nets,” he added.
In a fact, charity based microfinance models rather than profit based models is more effective in addressing hardcore poverty, he said.
Siddique suggested that like the annual agricultural credit program, MRA may formulate and implement annual microfinance program in order to manage microfinance smoothly.