8 months ago

PSB seeks Tk 100b to cut poverty

It wants the fund from govt in 10 equal yearly instalments

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State-owned Palli Sanchay Bank (PSB), a low-cost lender for micro and small farms, has sought a special government allocation of Tk 100 billion to meet its liquidity shortfall, ensure smooth operations and mitigate poverty.

The bank's chairman recently requested the Financial Institutions Division (FID) of the Ministry of Finance to take steps to provide the fund in 10 equal instalments over a period of 10 years to 2032. The FID forwarded the request to the finance division, sources said.

"We received a letter on the issue from the FID and are working on it," a senior official at the finance division said.

A high-profile meeting of the government held in August 2021 had recommended providing the bank with a special minimum allocation of Tk 10 billion a year for a period of 10 years so that the bank could achieve its targets linked with the sustainable development goals (SDGs).

Chaired by the then secretary at the Prime Minister's Office (PMO), the meeting suggested holding a joint meeting between the Ministry of Rural Development & Co-operatives and the FID and send a status report on the bank to the PMO.

Later, the status report observed that the bank does not have the ability to invest as much funds as required for mitigating poverty commensurate with the SDGs.

In a letter to the FID, PSB Chairman Md. Akram-Al-Hossain said: "We're working on including 10 million people as members of the bank and engaging them in income-generating activities. So, the bank needs a huge amount of funds."

Besides investment, the funds are to meet the operating costs, he added.

Currently, the bank has 10,604 employees and 0.12 million village development associations while 5.38 million poor families - 3.23 million female and 2.15 million male - of the rural areas have so far been brought under the bank's services.

The volume of village development funds stood at Tk 76 billion and a total of 3.3 million family firms have been established so far.

The current asset of the specialised bank stood at Tk 110 billion. Besides, some 0.274 million people received skills development training.

The authorised capital of the bank is Tk 10 billion and its paid-up capital is Tk 2.0 billion, according to data from the bank.

The bank's micro and SME loans bear 8.0 per cent and 5.0 per cent service charges respectively.

The members of the village associations and other customers of the bank are very poor who are trying to increase their income by setting up small farms in their homesteads.

More than 33 per cent, 21 per cent, 11 per cent and 12 per cent of the members invested in cattle rearing, poultry farming, fishery and other agricultural farms respectively, according to the bank.

The main goal of the bank is to eradicate poverty. The poor rural people who deposit money with the bank become its members and get services, sources said.

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