1 State Minister for Planning, I Civil Aviation and Tourism Dr ! Mohiuddin Khan Alamgir yes-| terday observed that efficient .' rural credit programmes are es-I sential to mitigate poverty.

Alamgir also found contradictions within the poverty alleviation programmes. He said ! such programmes had not made i any impact on the economy. He urged experts to investigate the matter.

He was inaugurating an 1LO-Japan funded national seminar on "Rural Credit Operation for Employment Promotion" at the Bangladesh Institute of Bank i Management (BIBM) yesterday.

Bangladesh Bank Governor Lutfar Rahman Sarkar, ILO Assistant Director-General Mitsuko Horiuchi. ILO Dhaka Director Paul J. Baily, and BIBM Director-General AHM Nurul Islam Choudhuri also spoke on the occasion.

.Pointing out the loop-holes

of rural financial institutions. Alamgir said a considerable number of beneficiaries dropped out of the programmes.

He reiterated the need for extending banking operations among the large numbers of landless rural people who could not afford collateral. The Minister also asked the bankers to support 22 per cent of rural women, who run their family financially.

The Minister made three specific points — regarded by the government as major thrusts — for consideration concerning improvement of the poverty situation: continuous flow of funds for small disbursement, timely disbursement and minimisation of disbursement costs.

Alamgir urged the central bank to devise a credit mechanism which would ensure that rural credit operation had the desired impact on poverty and

economic growth in the country.

In his speech. Lutfar Rahman Sarkar said Bangladesh Bank was maintaining an "indicative, rather than directive' policy regarding the rural credit programmes."

Dr Alamgir urged the Bangladesh Bank to look into methods of calculating interest rates on loans disbursed in rural and urban areas.

"I have been informed that rural people were repaying at higher interest rates than city borrowers." Alamgir said.

Alamgir said the country's bank accounting system need correction so that the poor borrowers need not pay more than their city counterparts.

"Although the Dank charges a low rate of interest on rural credit, the method of calculation of interest is not transparent enough to the beneficiaries," he said.