Micro-finance should extend collateral-free loans: Governor SBP

Kathmandu, Feb 28: Governor of State Bank of Pakistan (SBP), Ashraf Mahmood Wathra, has said that micro-finance institutions should be able to extend collateral-free loans to people of deprived sectors and those living in rural areas.

“Micro-finance institutions serve a poor and deprived sector person which ultimately helps a country for equitable economic growth and financial inclusion. They should float loans to these people without seeking any collateral,” Wathra said, addressing the ´2nd International Conference of Economics and Finance´ organized by Nepal Rastra Bank (NRB) in Kathmandu on Friday. He also claimed that Pakistan was the first country in South Asia to introduce a law related to the micro-finance. “The interest rates that micro-finance institutions in Pakistan are charging is one of the lowest in South Asia,” Wathra, the chief of Pakistan´s central bank, said.

The two-day conference that concluded on Friday brought together of 250 participants from 12 nations.

Researchers, academicians and central bankers from various countries presented 50 research papers on issues related to financial sector development, economic growth, capital market, foreign exchange, micro-finance and financial inclusion, poverty alleviation, inflation, monetary policy, corporate governance, enterprises and food security, among other financial and economic issues.

Speaking at the inaugural session earlier on Thursday, NRB Governor Yubaraj Khatiwada had opined that the roles and responsibilities of a central bank was changing following the financial crisis of 2008 and economic crisis in Europe.