Microfinance institutions have sought loans from the Bangladesh Bank without or low-rate interest.
They claim that during the pandemic situation, it will be possible to disburse microcredit at low service charges.
According to the microfinance institutions, they are facing a liquidity crisis in the current situation, and if they fail to meet the crisis and are unable to make refinancing, they will lose their customers' confidence and ultimately fall into a new crisis.
There is a huge demand for loans at the rural level to revive the economy and that is why the microfinance institutions need financial support, said speakers at a regional conference titled "Impact of Covid-19 on Microfinance and Microfinance Institutions" hosted on Wednesday by Credit and Development Forum (CDF), a national microfinance network in Bangladesh.
CDF Chairman Murshed Alam Sarkar, also executive director of the private development agency Poppy, presided over the event.
Brac Programme Head Tanvir Rahman Dhali presented the keynote speech at the conference.
Murshed Alam Sarkar said the microfinance institutions have been deprived of having a huge sum of money realised due to the long-term closure of field activities in the wake of pandemic.
Besides, all the expenses have been met on a regular basis during this period, and as a result, the institutions have suffered a huge financial loss, he said, adding that as their expenditure is more than their income, many small and medium microfinance institutes will face capital erosion.
This will leave an impact on the process of their borrowing from external sources, observed Murshed.
In his address, CDF Executive Director Mohammad Abdul Awal urged Palli Karma Sahayak Foundation, scheduled banks and other financial institutions, including the Bangladesh Bank, to come forward with easy terms and flexible interest-free packages in this situation.
As a result, customers will be able to take loans on easy terms and at flexible interest rates, he said, adding that the microfinance institutions have started disbursing loans to the agricultural sector at the field level in response to the Prime Minister's call for steps to keep the rural economy afloat.
It is also necessary to announce another incentive package of Tk10,000 crore in the agricultural sector, suggested Awal.
Speaking as the chief guest, Zakir Hossain, chairman, Bureau Bangladesh, said some laws and regulations on microcredit regulatory finance need to be amended to make the lending more dynamic and strong at the field level.
This will make it easier to disburse loans, he added.
Journalist Khwaja Mainuddin advised the microfinance institutions to seek cash assistance from the government to alleviate their financial woes.