NGOs’ interest rates should be reduced to reduce poverty

In order to fight against poverty, non-governmental organizations (NGOs) should have their interest rates lowered, and the terms of their loans should be simplified. Foreign Non-governmental organizations work in other countries in the world. But our country's NGOs need to be revised. We see most of the country's poverty reduction, but our poverty doesn't. Why? Our country has a lot of national and international NGOs. But they don't work to reduce poverty in our country. Our poverty rate isn't decreasing.

In poverty-reduction areas, donor contributions could be utilized more efficiently. Instead, the NGOs invest in increasing their income from donor funding. They are driven to prevent the impoverished from becoming independent. As the underprivileged grow self-sufficient, donor contributions will decrease, resulting in NGOs earning less. Furthermore, NGOs continue to benefit by profiting from poverty, and their longstanding concern for poverty reduction will diminish.

Grameen Bank helps to alleviate poverty through microcredit. Not only Grameen Bank but also BRAC, ASA, and other banks need to work to reduce poverty. However, there are several incidents of poor women losing their houses because they could not repay their debts. Many Christian missionary NGOs face accusations of evangelizing in the name of assistance.
According to the Banikbarta report, our country's poverty was 24.3% in 2016. Even in 2018, our poverty decreased by 21.8%, but after Covid-19, our poverty increased. Last, this rate reached 42% when every country faced covid-19 in 2020. Our poverty rate is 20.5%, according to a Finance Ministry speech in 2022. We can show that our poverty rate has increased, but our country has a lot of NGOs. Firstly, we will know about NGOs' history and how much NGOs have in the country.

When discussing the history of non-governmental organizations in Bangladesh, The Baptist Missionary Society is the first name that comes to mind. Since 1794, this organization has been in operation. The Christian Mission Hospital, founded in Rajshahi in 1880, is a prominent local NGO. The Kumudini Welfare Trust was the first foreign-aided local NGO created in 1994. Following its independence in 1971, NGOs in Bangladesh began to expand as they stepped up to help with the enormous challenge of rebuilding a war-torn nation. Some groups changed their focus from supporting direct interventions to encouraging the social and economic empowerment of the rural poor when the need for rehabilitation and relief subsided. Currently, Bangladesh has 2484 NGOs, and foreign funds control 240 NGOs. The NGO Affairs Bureau (NGOAB), established in 1990 as a division of the Prime Minister's Office, is required by law to register NGOs that receive, apply for, or are interested in obtaining donations from sources outside the country.

The Association of Development Agencies in Bangladesh (ADAB) was the top body of local, national, and international NGOs involved in development operations in the country for several decades. However, ADAB could not continue its operations successfully, and a few years ago, the Federation of NGOs in Bangladesh (FNB) arose as the new umbrella organization. PKSF was founded in May 1990 as an apex financial institution that aids NGOs in growing their microcredit initiatives aimed at alleviating poverty.

NGOs loan interest every installment, and people face various problems while depositing 20% to 30%. Some people even killed themselves for the NGO's high interest rate. The loan taker could be better most of the time they sell their land and house to give weekly installments. According to the dailynayadiganta report Mitapokor, 90% of people are taking loans from NGOs. They are entangled in the debt net of NGOs. In our country, most females are implicated in the debt net of NGOs. Our government held 27% interest rate on NGOs in 2010. It was also said that the interest rate will be reduced gradually. But in the last 10 years, the authority didn't act to reduce the interest rate. In 2019 years, this interest rate was held at 24%, according to a recommendation by the finance ministry. Last year, NGOs' interest rates were under 9%, but micro-credit institutions took above 18%.

NGOs should take low-interest rates, under 10%, if they want to reduce poverty in our country. But this decision is impossible for these NGOs because they want money and how to increase their business. Our country's village people are always poor, but why? Because NGOs don't work correctly. They want to be controlled by foreign funds. Every village has an NGO branch, but they don't give low-interest rate loans. Even some people sold their land for installments with high-interest rates. Some of them sell their domestic animals - cows, goats, house valuables, plants, and gold ornaments to pay installments, but because they do not pay the total loan, they often sell house to house. These indebted people want to get rid of the burden of debt. Also, some unscrupulous moneylenders in different villages have become millionaires by taking 30% to 40% interest, but these moneylenders are taking away the last shelter of the helpless people. In the name of jewelers, these money traders are doing interest business very aggressively. As a result, NGOs take opportunities like jewelers. It isn't delightful for our country. The Palli Karma-sahayak Foundation (PKSF) should give loans and funds to poor and impoverished people. NGOAB and FNB should maintain the rules to provide funds. The NGOAB and FNB should control every NGO.

NGOs should provide low-interest loans if they want to lower the poverty rate. Business or agricultural loans must have a less than 5% study period, while student loans must have no study time. After the research, these pupils showed 5% interest. House and land interest rates should range between 5% to 7%. Every NGO institution must bolster the education sector, the health sector, family planning, village planning, and the agricultural inspector and consult with the populace. Then, we anticipate that our nation's poverty rate will decline.

The writer is a student at the Department of Public Administration, Comilla University