DHAKA, April 5 (BSS)- Bangladesh Bank Governor Dr Atiur Rahman today stressed the need for developing insurance products, particularly health insurance and crop insurance, for the poor and urged all concerned to work together so that poor households can insure themselves against health shocks and crop losses.
"The biggest gap in microfinance is in developing insurance products for the poor, particularly health insurance and crop insurance," he said while addressing a seminar on 'Towards a Public Policy on Microfinance in Bangladesh.'
"Let us work together- microfinance regulators, program managers, development partners and the private sector so that poor households can insure themselves against the most common type of shocks - health shocks and crop losses - which often cruelly reverses the steady gains that our hard-working country men and women achieve," the governor added.
Atiur Rahman said economic growth is essential to generate the demand for the enterprises developed by microfinance and stable inflation is necessary to ensure that the progress poor people make from having access to savings, insurance and loans is not eroded away.
"It is clear that microfinance can protect households from shocks by smoothening consumption, contribute to changing societal norms about the role of women in society and lead to some households moving out of poverty," he added.
"Overall, microfinance has played its part in the impressive progress Bangladesh has made in poverty reduction over the past two decades, particularly in terms of strengthening self employment hence complementing the ongoing drive for deeper social safety-net platform promoted by the government," he pointed out.
He said Bangladesh has achieved successes in micro-credit in an unprecedented manner and one of the reasons it has managed to do so relates to the relatively light touch regulations that the industry faces.
"We're striving to achieve the balance of ensuring that microfinance institutions have the space to innovate while maintaining oversight of poor people's money, he said, adding that the central bank has set up the Micro-credit Regulatory Authority (MRA) to achieve this balance and it aims to strengthen its capacity to achieve these goals.
Another regulatory issue which the BB is dealing with now relates to mobile phone banking, he said, adding that now BB has developed guidelines to ensure a level playing field for mobile phone banking which will be a key component of achieving BB's financial inclusion targets.
"Microfinance industry as a whole will certainly benefit from the fast expanding mobile phone banking as this will reduce the cost of delivery and recovery of small loans in addition to improving transparent," he observed.
The BB governor said the central bank remains committed to maintaining a stable macro environment and a regulatory environment which safeguards people's money while ensuring that micro-finance institutions have the flexibility to develop financial products to suit poor people's needs.
Organised by Policy Research Institute (PRI), Institute of Microfinance executive director Dr M Mosleh Uddin Sadeque presided over the seminar. PRI chairman Dr Zaidi Sattar, vice chairman Dr Sadiq Ahmed and executive director Dr Ahsan H Mansur also spoke on the occasion.
Adviser and team leader of PROSPER Programme Dr M. A. Khan presented the keynote paper.