Simplify the loan disbursement process for returning migrants

The life of a migrant worker is fraught with many difficulties, ranging from the expensive and complicated recruitment process at home to precarious working conditions abroad. Unfortunately, these obstacles do not stop once they return – an overwhelming majority of returnees struggle to reintegrate into society and find productive ways to support themselves and their families. Although the Probashi Kallyan Bank (PKB), responsible for ensuring a smooth transition for returnees, introduced a reintegration loan in 2011, it has remained largely underutilized. Despite the huge demand for financial aid from returnees, only Tk 2.92 crore was disbursed in 2011-20 to a total of 111 applicants.

Then Covid-19 hit the world, crippling the global economy. Half a million migrants have been forced to return home, many empty-handed. The government, in a welcome move, has introduced three new categories of loans during the pandemic: the special integration loan, the women’s reintegration loan and the loan for self-employment. But although the disbursement rate has increased significantly over the past two years compared to the previous decade, a recent study published by the Ovibashi Karmi Unnayan Program (OKUP) shows that only 6,384 returnees received a total of 169.15 crore Tk under the special reintegration loan, which meant that only 2.6% of Covid-affected returnees received assistance. Meanwhile, no female migrant worker returnees have received loans under the women‘s reintegration loan or self-employment loan categories, despite the fact that female migrant workers are one of the most vulnerable populations in the world. countries and are in urgent need of guided financial assistance.

The OKUP study found that most migrant workers could not meet the eligibility requirements set by the PKB and that there were discrepancies between the bank’s rule and what its officials practiced. For example, although the rules state that anyone able to repay the loan can be a guarantor, a majority of migrant workers said they were asked by bank officials to find socially influential people or government employees as guarantors in more family members. Many said the many documents required of guarantors, including a signed check, and physical presence at the bank discouraged many from supporting migrants. Meanwhile, although there are no official requirements for business licenses or records of previous investments, many have reported that their applications have been rejected because they did not provide these records.

PKB should urgently take note of the findings of the study and take immediate steps to streamline the loan disbursement process. It should eliminate gaps between stated prerequisites and actual practices, facilitate the availability of guarantors, remove requirements to provide a long and unrealistic number of documents and consider prior skills and experience rather than prior investment as criteria for eligibility. Additionally, and most importantly, PKB, as a specialized bank for migrant workers, must realign itself to better meet the unique needs of the population and provide financial assistance that can alleviate, not magnify, their suffering.