A ceiling on interest rates charged on microloans might be imposed next week on microfinance institutions (MFIs) of Bangladesh by the Microcredit Regulatory Authority, the regulatory body that monitors the microfinance industry in the country.
The specific maximum rate would be announced next week.
Some MFIs are concerned that the proposed interest rate cap would threaten the survival of small MFIs. “Many will not be able to run their business with less than 15 percent,” said Shafiqual Haque Choudhury, president of ASA, an MFI in Bangladesh. Shameran Abed, program manager of MFI BRAC worries that an interest rate cap would force MFIs to move away from making loans to small borrowers to reduce operation costs.
According to the Microfinance Information Exchange (MIX), the Bangladeshi MFIs that reported data for 2009 have a gross loan portfolio of USD 2.3 billion, total assets of USD 3.5 billion and 20.2 million active borrowers.
By Trevor Kwong, Research Assistant
Sources and Additional Resources:
[1] Source Article: The Daily Star: Uniform interest rate looms for microlenders
http://www.thedailystar.net/newDesign/news-details.php?nid=158302
[2] Microfinance Information Exchange (MIX): Bangladesh:
http://www.mixmarket.org/mfi/country/Bangladesh\
[3] MICROCAPITAL BRIEF: Microcredit Regulatory Authority of Bangladesh Will Soon Finalize Microfinance Lending Rates, August 11, 2010:
[4] MICROCAPITAL BRIEF: Government of Bangladesh to Limit Interest Rates for Microfinance Institutions (MFIs), April 13, 2010:
[5] MICROCAPITAL STORY: Bangladesh Microcredit Regulatory Agency (MRA) Limits Interest Rates for Microfinance Institutions, May 6, 2009:
Browse the MicroCapital Universe and add your entry to the wiki at?https://www.microcapital.org/microfinanceuniverse/tiki-index.php
Similar Posts:
- MICROCAPITAL BRIEF: Non-performing Loan (NPL) Ratios Up Among Microfinance Providers in Bangladesh
- MICROFINANCE PAPER WRAP-UP: “Microfinance in India: Issues, Challenges and Opportunities;” by Mohammad Abu Saleh, Zubair Ahmad
- MICROCAPITAL BRIEF: Regulator Licenses ADIB Egypt to Open Shariah-compliant Subsidiary, ADI Microfinance
- MICROCAPITAL BRIEF: Mi-Bospo of Bosnia and Herzegovina Borrowing $2.2m from Grameen Credit Agricole Foundation for Microfinance Lending
- MICROFINANCE PAPER WRAP-UP: “Land Titling and Microcredit in Cambodia: Examining the Reality of Hernando de Soto’s ‘Three Steps to Heaven,’” by Milford Bateman
