BANGLADESH: PATHWAYS AND IMPACTS OF THE GLOBAL ECONOMIC SHOCKS
•
81
with very little money to buy food. The NGOs are very ‘professional’ about collecting installments—they will come to your house regularly and will wait for you. It does not matter whether you can eat or not, you have to pay the installments.” Village veterinarian in Naogaon, February 2011
Indebtedness became a growing concern. The branch of a microfinance NGO in Notun Bazaar closed down in the middle of the research period and relocated outside of the slum, near the more settled and middle-class mohalla area. The NGO stopped providing credit to waste merchants, rickshaw-pullers, and others from the slum because of the high risks of default. Yet microfinance continued to thrive in the rural community in Naogaon. Microcredit-lending NGOs were seen as competitive lenders but tough creditors, whom only death could shake off: “The situation is so severe that even the death of a family member does not make people sad—instead they are often relieved. I know someone whose wife died two day ago. But he showed no tension or sadness. I tried to understand the reason and found out that his wife had a loan of Tk 6,000 ($82). Besides, the price hike was making his life really difficult. Now, as his wife is dead, he will not have to worry about the loan or installments and at the same time, he no longer has to buy food for his wife. So overall, he is quite relieved.” Village veterinarian in Naogaon, February 2011
As these accounts are from only one of Bangladesh’s 80,000 villages, around 90 percent of which have microfinance lenders, they should be treated with caution and merely as illustrative of how some people are experiencing their debt burdens. The manager of an NGO branch office in the area, one of a handful of large microcredit lenders in the country, noted that there had been pressure on repayment rates with recent volatility. His organization responded by being more flexible and adapting repayment schedules to help people cope and by adopting more rigorous screening of borrowers, particularly because loan sizes were increasing alongside inflation. Despite the positive spin, it seemed clear that the office (one of more than 3,000 branches nationally) had been feeling the effects of people’s inability to repay: during the interview, a staff member rushed in to inform the boss that another borrower had just run away without repaying the loan. It emerged that 25 borrowers ran away without repaying in 2009, but only 12 in 2010. Yet in just the first two months of 2011, seven borrowers had already run away.