A recent report from Bangladesh’s Microcredit Regulatory Authority (MRA), a Bangladeshi agency charged with licensing and supervising microfinance institutions (MFIs), reportedly indicates that as of June 2012, the end of the last fiscal year, Bangladeshi MFIs have disbursed approximately BDT 211 billion (USD 2.7 billion) in microcredit since such data has been tracked. The percent growth of microcredit services provided by the 675 operational Bangladeshi microfinance institutions (MFIs) to all of their members in extreme poverty increased by an undisclosed amount during the past fiscal year. An unnamed high official of MRA has attributed this growth to the expansion of microcredit in rural areas due to the diversification of microcredit products to include products tailored to rural needs.
According to the MRA’s Annual Report for 2012, which has not yet been released publicly, Bangladeshi microfinance institutions’ (MFIs) funding capability has gradually been increasing since 2009. The report notes that this increase is due, in part, to the decline in MFIs’ dependence on funds from external sources in favor of increased deposits collected from clients. External MFI funding sources include commercial bank loans, donations and funds from the Palli Karma Sahayak Foundation, which was established by the government of Bangladesh to fund microcredit programs.
By Makai McClintock, Research Associate
About Microcredit Regulatory Authority
The Microcredit Regulatory Authority (MRA) is Bangladesh’s primary regulator over the microfinance activities of NGO microfinance institutions (MFIs). MRA has three primary functions: to license MFIs, to supervise MFIs for compliance with licensing requirements and to enforce sanctions against non-compliance. In addition, MRA monitors microfinance activity through audits and addresses customer complaints. The Board of Directors, which oversees the governance of MRA, consists of heads of executive levels of government, including the Governor of Bangladesh Bank, Dr. Atiur Rahman who serves as Chairman.
Sources and Additional Resources
The Financial Express, “Microcredit Operations Expanding,” http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDRfMTRfMTNfMV8yXzE2NjM4NA
The Financial Express, “Deposits Cutting MFI’s Reliance on Other Sources for Funds,” http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDRfMjZfMTNfMV8yXzE2NzYzMQ
MicroCapital, April 8, 2013, “MICROCAPITAL BRIEF: BRAC Applies Microcredit Strategies to Water, Sanitation, Hygiene (WASH) Programme in Bangladesh,”
https://www.microcapital.org/microcapital-brief-brac-applies-microcredit-strategies-to-water-sanitation-hygiene-wash-programme-in-bangladesh/
MicroCapital, December 11, 2012, “MICROCAPITAL BRIEF: Central Bank of Bangladesh Requires Banks to Open 50% New Branches in Rural Areas,” https://www.microcapital.org/microcapital-brief-central-bank-of-bangladesh-requires-banks-to-open-50-new-branches-in-rural-areas/
MicroCapital, November 18, 2010, “MICROCAPITAL BRIEF: Bangladesh Microcredit Regulatory Authority (MRA) to Restrict Fees, Cap Microloan Interest Rates at 27%, Discourage Flat Interest Rates,” https://www.microcapital.org/microcapital-brief-bangladesh-microcredit-regulatory-authority-mra-to-restrict-fees-cap-microloan-interest-rates-at-27-discourage-flat-interest-rates/
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