December 06, 2007	Thursday	Ziqa'ad 25, 1428

DHAKA: Survivors of Bangladesh’s cyclone will not have to keep up repayments on microfinance loans after the country’s army chief asked lenders to suspend the debts, the army said on Wednesday.

Tiny loans used to lift people out of extreme poverty were pioneered in Bangladesh by Muhammad Yunus and the Grameen Bank. Yunus and the bank he founded won the Nobel peace prize last year for their work.

“Considering the suffering of the people in the cyclone-affected areas, the army chief (General Moeen U. Ahmed) has asked all microcredit lending organisations to waive payments of loan instalments until April 2008,” the army said in a statement.Nearly 3,300 people died and an estimated 564,000 were left destitute as a result of the Nov 15 storm, the second most powerful cyclone to hit the disaster-prone country since recordkeeping began.

Grameen Bank has suspended all loan repayments until June 2008, said spokesman Nur Jahan.

Another lender, the Association for Social Advancement, said it would be offering interest-free loans to help cyclone survivors get back on their feet and that existing loans would be suspended.

“We have stopped collecting loan instalment from borrowers in the affected areas up to June 2008,” said spokesman Habibur Rahman. “We also have stopped collecting loan instalments in the four most affected districts indefinitely.”

Cyclone survivors have demanded that banks write off all loans although Yunus has rejected the calls.

“We cannot cancel the debts. If we cancelled now, every time something happened, a house fire or whatever, then people would be looking to cancel their loans,” he said last month after the cyclone hit.

Bangladesh is among the poorest countries in the world with nearly 40 per cent of its 144 million population getting by on less than a dollar a day.

Grameen bank alone has more than six million borrowers in the country, 97 per cent of whom are women.

Bangladesh is under emergency rule of a military-backed government which came to power in January and has pledged to clean up Bangladesh’s corrupt politics before holding fresh elections in late 2008.—AFP