Today (14th September) we will observe Honorable Chief Advisor of Govt of People Republic of Bangladesh Dr. Yunus to inaugurate PKSF Bhavan 2. It’s a moment of joy for us as PKSF facilitates around 300 local NGO MFIs with Micro Finance plus mostly with health, education, disaster response and technology for income generating activities.

Mostly as because of subsidized loan this NGO MFIs are financially sustainable, ie, not dependent on donor money, although they do projects with donor money on various issues. Nowadays, NGO MFIs are progressively regulated by Microcredit Regulatory Authority.
Dr Yunus is a personality behind the establishment of PKSF. There is one issue which I feel that have to be solved in preparing new law or revising the existing related laws. Non-Performing Loan (NPL) is nowadays well known to us, especially since it is the highest in Bangladesh in South Asia. We know why it has happened as because of bad governance in banking sector.

I am afraid that it may happen in micro credit sector too, as there is misappropriation by some staff and also by group members. Such a misappropriation is not happening in branch level but it is happening in group level, while field staff / credit officers are responsible for collecting the money and depositing it in branch offices.

Most of the field staff of NGO MFIs are jobless HSC passed boys and girls of the locality, may be first time in life most of them handle lakhs of money in field, some of them hardly able to restrain themselves in misappropriation. Some of the group members are also helping them in misappropriation.

Now a days, a group meeting hardly happened as poor people are busy and the field staff / credit officer go home to home meet them in person and collect money, so group collateral hardly working.

In course of time such misappropriation unearthed through audit, NGO MFIs has to lodge cases against these boys and girls some time against their guardians. In general, judges / court found sympathize to the NGO MFIs and try best to recover the misappropriated money. But for solving these, it takes years after years.
So, as a small practitioner of credit rights to the poor people and I consider these NGO MFI money as public money (please note that around 30 to 35% of revolving credit fund of NGO

MFIs are group member savings), there should be speedy trial process of those misappropriated money and need to take legal action against those corrupted staff. So that there will be little of NPL in micro credit sector.

We request Dr. Yunus government to take steps to make the legal arrangement for speedy trial in respect of misappropriation of NGO MFI money and corrupted staff.