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cash-strapped sharecroppers. The central bank's board approved
the fund at a meeting on Thursday, said a BB source. The board
also decided to disburse the fund through a leading non-government
organisation, having enough experiences in small lending in the
country. 'The central bank will start the selection process of the
NGO next week. The loan would be disbursed in 150 upazilas and the
upazilas will be selected from across the country considering the
situation and needs of the sharecroppers,' the source said. The
central bank, he said, has fixed the interest rate at 10 percent so
that the marginal borrowers could afford the loan. He said the
loan would be given to the groups of sharecroppers instead of
individuals and the selected NGO would form the groups. 'The
groups would also be provided with necessary training on their
professions and managing of loans so that they could perform better
in farming and repayments of the loans as well. For the first time
in the country's banking sector's regulator offered sharecroppers the
soft loan facility,' he said. At present, most of the
sharecroppers could not borrow money from the conventional credit
system mainly due to their inability to provide collateral against
the borrowing loan. 'In many cases, the sharecroppers borrow money
from local lenders and have to pay high interests after harvesting of
crops, keeping little return for them,' the BB official said. He
observed that the soft loan would give cheaper credit option to the
sharecroppers ensuring supply of necessary fund to the farm sector.
'It would also help to increase crop production in the country,' he
added. Another source said that the central bank has been
reviewing the capacity of BRAC in managing the loan portfolio. 'It
is most likely that the country's largest NGO would get the
responsibility of disbursing the loan as it has experiences in
working with unprivileged people with an efficient country- wide
network', he added.
