PKB’s poor capacity behind low loan disbursement to returnees: Study

The special reintegration loan – introduced in July last year to help returnee migrants get back on their feet – could not reach the lion's share of its targeted demographic due to Probashi Kallyan Bank's (PKB) poor operational capacity, says a recent study.

More than 4.8 lakh migrant workers returned home amid the Covid-19 pandemic, and many of them lost their jobs in destination countries. Of the Tk700 crore in low interest loans, the bank managed to disburse only Tk298.16 crore to 12,767 returnees till July 2021, insiders have said.

This data indicates that only 2.6% of the returnee migrants have taken advantage of the special loan facility during this one year period. According to the PKB's organogram, the bank does not have an adequate number of branches, and the existing ones do not have sufficient manpower.

The research "Challenges of Disbursing Special Reintegration Loan of Probashi Kallyan Bank" was jointly conducted by the Centre for Policy Dialogue (CPD) and Refugee and Migratory Movements Research Unit (RMMRU) from June to August this year, and published at a virtual event on Thursday.

As part of the study, these organisations also researched ways to help PKB implement the government's plan in providing loans for economic reintegration of returnee migrants.

The research found that 22% of the migrant returnees have not even heard about PKB, and they do not have any information regarding loan packages being offered by the bank. About 12% of the returnees are estimated to be female, but only 1.15% of the reintegration loan recipients are female till April this year.

The existing loan terms – even after the bank eased those through amendments – are not very congenial, and permissible activities under the loan scheme are not distinct to a section of potential clients, read the findings.

"The loan disbursement targets are either overambitious or not judiciously assigned, and these targets are hardly achieved by the branches. The loan services are being provided directly from the branches, most of which are located in the urban areas," it adds.

CPD Research Director Dr Khondaker Golam Moazzem, who is one of the lead researchers, said at the event, "The PKB is heavily understaffed. As per the bank source, the institution's organogram was designed considering at least eight employees in each branch.

"So, the existing branches need at least 632 employees for a smooth operation, but PKB had only 286 employees as of early June this year."

The study also finds that the existing employees are yet to receive foundation training. When the research began, PKB had only 79 branches, now the bank has 86 of those.

It further says that the performances of the PKB branches in terms of target achievement and employee productivity appear to be highly skewed.

The top performer group – which is only 23% of the PKB branches – could achieve only 20-35% of the targeted volume of total loans during FY21, and over 35% of the branches could not reach even 10% of the same mark in this period.

Dr Moazzem continued, "Despite expanding branches over the years, PKB is yet to reach the doorstep of migrant workers, their families and returnees with its network. Most of the bank's branches are concentrated in Dhaka, Chattogram and Khulna division.

"Regarding the distribution of PKB branches against the number of migrant workers in different divisions, the deviations do not seem to be very significant. Moreover, the bank is yet to introduce efficient payment and remittance services.

"There are scopes for introducing basic banking and technology driven financing services in PKB." 

Recognising the limitations, PKB's Managing Director Md Zahidul Haque said, "We are planning to open 300 branches within 2024-25, and our manpower shortage will be eliminated gradually." 

The research recommends the bank to improve information collection, dissemination and associated networking with migrant workers. The involvement of non-government organisations can also accelerate the loan distribution process.

Dr Ahmed Munirus Saleheen, secretary of the Ministry of Expatriate Welfare and Overseas Employment and also the chairman of PKB participated in the virtual event as the chief guest, while Founding Chair of RMMRU Dr Tasneem Siddiqui moderated the event.