The discussion on 'Poverty reduction and budget 2004-05: perspective and challenge' was organised by Credit and Development Forum (CDF), an NGO, at the Press Institute of Bangladesh.

The NGO (non-government organisation) representatives said the government has allocated Tk 1,434 crore for a special government-run microcredit programme to create employment opportunities in the country.

It was also proposed to disburse 72 percent of the allocated fund through public institutions and 28 percent through the NGOs.

But the NGO leaders said the allocation is not sufficient to create adequate job opportunities in the rural areas.

They said the NGOs have proved their competence in disbursing fund allocated for microcredit programme whereas the government organisations have failed to properly implement their microcredit projects over the last several years.

The discussants urged the government to formulate a policy to check irregularities, corruption and inefficiency in various ministries and divisions involved in microcredit operations.

They also suggested setting up of a national monitoring cell for supervising microcredit programme of the banks.

The government suggestion to reduce the microcredit interest rate of NGOs from 15 percent to 12.5 percent is not acceptable, said Dr Atiur Rahman, chairman of CDF.

He said an amount of about 10,000 crore is lying idle in the country's public banks, which could be used for the microcredit programmes.

Atiur said the government can use this money by giving subsidy to the NGOs to benefit the poor people. "If the government decides to give subsidy to the NGOs' microcredit programmes, the NGOs will be able to slash their interest rate," he added.

The government could form a task force, in collaboration with the NGOs, to monitor the microcredit projects of the NGOs, he added.

He also recommended opening of a branch of Bangladesh Krishi Bank at every union for disbursing agriculture credit.

Khondker Ibrahim Khaled, managing director of Pubali Bank Limited, said it has now become necessary to formulate an NGO law to help institutionalise and empower the NGOs.

Bangladesh Bank can utilise the idle money through the NGOs at 5 percent interest rate while the NGOs will give the money at 7 to 8 percent interest rate to the rural people, he suggested.

M Abdul Mannan, executive director of CDF, Abdul Awal, director of CDF (network and advocacy), Imrul Hasan, project advisor, Plan International Bangladesh, and leaders of different NGOs also spoke at the discussion.