B Mirror Desk : During a recent event, Chief Adviser Professor Muhammad Yunus asserted that microcredit should be recognized as legitimate banking. He highlighted the importance of creating a Microcredit Bank to foster entrepreneurship by providing small, collateral-free loans to youth. He stated, ‘Microcredit has evolved to a point where we need to consider a new approach — the creation of a Microcredit Bank. It has transitioned from being an NGO and must now advance beyond that status.
‘ This remark was made during the inauguration of the Microcredit Regulatory Authority (MRA) building in Agargaon, Dhaka. As the chief guest, Professor Yunus, who is often credited with founding the microcredit movement, suggested the development of a distinct Microcredit Bank Act to facilitate the bank’s establishment. He noted the current limitations of microcredit organizations, which can accept savings from members but are prohibited from taking deposits from the public. ‘The moment has arrived to launch a Microcredit Bank,’ he declared. ‘Once it is licensed, this institution should function as a social business bank rather than a traditional one.’ Professor Yunus stressed that the legislation must guarantee that the Microcredit Bank’s owners do not profit from its operations.
While loan recipients may gain advantages from the bank, he emphasized that investors should not profit from this arrangement. Reflecting on the foundational principles of Grameen Bank, the chief adviser stated that it operates on the premise that every individual possesses entrepreneurial potential. He highlighted that young individuals will have the opportunity to secure loans without collateral from the Microcredit Bank to invest in their businesses and become entrepreneurs. ‘With access to capital for their initiatives, young people will no longer need to look for employment,’ he remarked. ‘As a government, we have a duty to create institutions that empower the youth,’ he continued.
Discussing the evolution of Grameen Bank, he pointed out that traditional banks require guarantees for credit, whereas Grameen Bank extends loans to the underprivileged based on trust. He also mentioned that public funds have been misappropriated in many traditional banks, while Grameen Bank has upheld transparency in its practices. ‘Microcredit represents true banking, and it is essential for people to embrace it,’ he asserted. Professor Yunus praised the Microcredit Regulatory Authority for exemplifying transparency and fulfilling its vital role.
