A community-level discussion on “Current Challenges of Microfinance and the Potential of Soft Microfinance” took place in Araihazar, Narayanganj, bringing together local community leaders, influential residents, social workers, microfinance stakeholders, and other participants to examine ways of making financial services more accessible and borrower-friendly, a press release said.
ATM Ridwanul Haque, Founder and CEO of Agroho Society, who first coined the term Soft Microfinance, discussed the difficulties many low-income families encounter when accessing microfinance, particularly the pressure of borrowing costs, and the risk of falling into further financial distress. He called for a more compassionate financing approach that helps people build livelihoods rather than adding to their economic burdens.
Presenting the Soft Microfinance model, Ridwan explained that it follows the principle of “Cash + Care,” combining access to finance with responsible borrower support. The mechanism excludes compound interest, limits the one-time variable service charge to a maximum of 8% of the loan amount, and caps late-payment charges at 1% annually on overdue amounts only. It also rejects compulsory savings and forced purchases, while providing scope for hardship-based waivers in genuine cases of financial difficulty.
He noted that the model seeks to balance institutional sustainability with social responsibility, ensuring that financial assistance serves as a pathway to economic recovery and independence.
Participants shared their perspectives on adapting microfinance to local needs, supporting small businesses, and protecting vulnerable borrowers. The discussion highlighted the potential of Soft Microfinance to advance a fairer, more inclusive, and dignity-centred approach to poverty reduction.
