The government is going to enact laws on regulatory authority for micro-credit institutions and public procurement soon.
The laws aim at streamlining the micro-finance in the country and combating corruption in the public procurement.
"I will place the public procurement policy (PPP) in the cabinet Monday next for making it into an act. I will also try to place a draft micro-credit regulatory framework in the cabinet for making it as an act on the same day," said Finance and Planning Minister M Saifur Rahman.
Saifur Rahman was speaking Wednesday as chief guest at the inaugural session of the two day-long SAARCFINANCE Governor's Symposium on Micro-credit held at a city hotel.
Governors and senior officials of the central banks of the SAARC countries attended.
Managing director of the Grameen Bank Muhammad Yunus presented the keynote paper at the inaugural session of the symposium.
Saifur said the non-governmental organisations (NGOs) offering micro-credit should have some accountability. They are supposed to work for the welfare of the people, but many of them are apparently involved themselves in other activities including financing terrorism and promoting religious activities, he said.
The minister said the NGO Foundation (NF) would work as the central body for regulating the NGOs in the country and this body would be run by the government.
He said the outside financers of the NGOs pull strings from behind and finance terrorism and religious activities.
Terming the micro-credit as the tool to serve the poor, Saifur urged the micro-credit lenders to increase the quantum of the loan and reduce the interest rates.
The institutional framework of the micro-credit philosophy would help reduce poverty in sustainable way, the minister said adding that the rural people are deprived of loans provided by the conventional banking system.
He was critical about the loan disbursement system by some state-owned banks in the rural areas where the farmers hardly get any loans from such banks.
He said the food for education programme initiated by the BNP government got huge response and the enrollment of students in the primary schools reached 90 per cent reducing gender discrimination.
Prof. Yunus reiterated his call for setting a separate legal framework and a separate Micro-credit Regulatory Commission.
He said the laws relating to micro-credit should allow and encourage NGOs to convert one or more units of their micro-credit operation into Micro-credit Banks (MCBs).
The law should encourage creation of start-up MCBs, without going through the process of being born as an NGO-MCP as a first step and then converting it into an MCB as a second step, he said.
The law should clearly state that an MCB is a bank which primarily serves bottom 50 per cent or people earning less than a dollar a day, Yunus said.
Governor of the Bangladesh Bank (BB) Salehuddin Ahmed said the government had established the Micro Finance Research and Reference Unit (MRRU) at the Bangladesh Bank, which drafted the law on independent regulator authority.
He said time has come to switch over to financing micro-enterprises and small businesses from micro-credit financial institutions alone.
Salehuddin said formal financial sector assets are heavily concentrated in the banking sector with nationalised commercial banks accounting for 80 per cent of total banking sector assets.
Commercial banks in the country serve no more than 25 per cent of the population and historically the remaining populace has not had access to formal financial services.