Grameen Bank’s profit rises, interest declines

Publication : The Financial Express Published : 15 Aug 2017, 21:42:23

Grameen Bank has earned good profit in recent months despite the lending rate cut by the present management, according to the latest data available from the bank.

The bank for the poor made a profit of Tk 1.02 billion (102 crore) in the first six months of this year as against the yearly profit of Tk 1.39 billion in 2016, reports BSS.

On the other hand, the bank is now charging lower rate of interest for lending to its members who mainly belong to the lower income groups of the society.

“We are now charging the highest 20.0 per cent interest against a loan though the ceiling of interest is 27.0 per cent fixed by the Microcredit Regulatory Authority (MRA),” said acting Managing Director of the bank Ratan Kumar Nag.

While talking to the news agency, he claimed the rate is the lowest among the microcredit organisations in the country.

Besides, he said, the rate of interest is even lower for various purposes.

For instance, the interest rate for education loan is 5.0 per cent and for buying house is 8.0 per cent.

“In addition, Grameen Bank offers interest-free loan to help rehabilitate beggars and other people who are struggling for a better life,” Nag said.

Apart from lowering the interest rate, the bank has also initiated exploring new areas of lending with the aim of bringing more people under its operations, the bank’s high official said.

“The bank has so far disbursed loan to 52,000 students for higher education while planning loan for helping medical graduates to establish hospitals in rural areas to provide poor people with better health services,” Nag said.

He said the bank is also providing loans to rural entrepreneurs who need financial support to expand their existing businesses.

“The expansion of loan operation coupled with efficient monitoring of its disbursement and recovery helped the bank increase its profit while cutting interest rate for the betterment of its low-income clients,” the acting MD said.

“We have increased field-level monitoring and launched Skype for maintaining communications with Regional Managers and field-level officials,” he added.

According to him, loan disbursement surged to Taka 187.54 billion last year from Taka 96.15 billion in 2010 when the rate of loan recovery was 99.05 per cent in 2016 against 97.37 per cent in 2010.

The number of the bank’s members or loan recipients increased from 8.341 million in 2010 to 8.902 million in 2016 and overdue loans also fell significantly in the recent months while it came down to 0.41 per cent in June this year from 0.55 per cent in 2016 and two per cent in 2015, Nag said.

“All the bank’s indicators including profit, loan disbursement and recovery and number of beneficiaries are currently on a steady rise,” he said, adding that the bank has already brought all the villages of the country under its operation.