The biggest structural irony is in our existing financial structure. The cost of a loan has an inverse relationship with its economic status. That is, a person who is financially poor and under-resourced is compelled to take a loan at a high interest rate.

Such people cannot even reach the doors of the bank. But for those with high incomes, the doors of the bank are always open with cheap interest rates. And the class who have to spend their evening and morning meal is in a situation where they are not able to get a loan without getting trapped in the quagmire of meter interest. That is why the poor class has to spend more money on interest than expected.

If you look at the loan market, it looks very inclusive and multi-layered. But if you get to the bottom of it, it is dividing the citizens on the basis of class. The credit market is operating on the basis of financial access, availability of collateral and the complexity of the paperwork. Poor citizens who do not have land to mortgage and cannot afford formal documents are dependent on moneylenders. In the informal sector, 50 percent or more is charged as interest annually. Such loans taken for daily subsistence, treatment or going to foreign employment are pushing the low-income class into a cycle of lifelong slavery.

Co-operatives are attracted to the upper class of co-operatives rather than the class who take loans from the moneylenders. Cooperatives are preferred by those who have a small amount of access and are known locally. Where the interest rate is usually around 12 to 20 percent. However, the cooperative sector has also not been able to become safe and accessible to the poor due to the mischief of the operators and weak regulation.

A little more affluent class than this level do business in microfinance institutions. The Rastra Bank has set a maximum interest rate limit of 15 percent for microfinance. Microfinance opened targeting the poor, women and small entrepreneurs has contributed to financial inclusion to some extent.

The cheapest level of credit flow is the formal banking system. Only the middle and upper class people who have documents, official sources of income and adequate collateral have access to commercial banks, development banks and finance companies. According to the policy of the Rastra Bank, the banks provide loans at a comparatively cheaper rate by adding a certain percentage to the base rate. This shows that those who have mortgages and access get cheap loans, while those who have mortgages and access are compelled to bear the burden of expensive loans.

The one who has a good income has the lowest interest rate and spends accordingly. The process of paying the highest interest rate to those who have the lowest income is creating a cycle of poverty, not prosperity. An even more serious social and economic distortion arises when the cheap loans from the formal system misuse it.

The well-to-do class who have easy access to the banking system, who like to call themselves elite, withdraw money from the bank at a cheap interest rate and invest the same money in the informal market at high interest. The monopoly of a particular class on cheap capital and the financial exploitation of the poor on the basis of it has deepened and widened the gap of economic inequality in the society.

The co-operative sector has also not been able to be safe and accessible to the poor due to the bullying and weak regulation of the operators

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We have a population of about 30 million, but ironically, more than double the number of bank accounts has been opened. According to the Banking and Financial Statistics released by the Central Bank, there are 53 million bank accounts in 53 financial institutions including 20 commercial banks, 17 development banks and 16 finance companies as of mid-July 2082/83.