Bangladeshs government will let the controversial Hallmark Group borrow money as long as it pays back what it conned out from Sonali Bank for six years under the guise of a loan, Finance Minister AHM Mostafa Kamal said Wednesday. Controversial Hallmark Group will have to repay loans it swindled from Sonali Bank in order to qualify as a borrower again, he said when asked to comment on the outcome of the meeting held between him and the Central Bank and officials of Financial Institutions Division at Finance Ministry. Banks, however, are required to review the banks actual state before they can refinance loans, said deputy governor S K Sur Choudhury.
Fonkoze is now using $14 million for making new loans, he said, saying that all of his accounts are safe. Fonkoze then gives each customer a new loan and an $125 lump sum payment, for a total of $8.5 million. The loans were supposed to have been made available to qualifying clients in the Treatment Branch should flooding occur in the branchs service area.
In Bangladesh, a BRAC Emergency Loan provides all of the benefits of an assurance, without any upfront costs. These early results indicate that emergency loans helped households manage their flood risks more effectively. Borrowers who had access to an emergency loan improved their overall repayment rates by four percentage points compared with a comparison group, particularly in the aftermath of the flood. Here, differences between treated and control households stem from 1) different payments that they could expect from decisions that they made in planting season; and 2) differential access to credit that results from availability of the Emergency Loan in flooded areas.
Key Takeaways Many small farming families are at considerable risk from disasters such as a disastrous drought or flooding, which can leave them impoverished, but can also leave them impoverished by restricting investment in higher productivity. Emergency food assistance can prevent disasters from harming the present and future well-being of the family, but does not provide the predictability that a family needs in order to take risks to invest for higher returns.
There is growing concern that some borrowers may be taking out loans that they cannot pay back unless they receive a high enough rate of return on their loans from a microfinance institution (MFI). Fonkoze has expanded the lending scheme, called Ti Kredi, or Little Loan, in order to target the poorest households who are not ready to borrow much. PayDay Alternative Loan is designed to help when you most need it, giving you a smaller loan with repayment terms that make sense for you.