The Microcredit Regulatory Authority (MRA) of Bangladesh reportedly has announced that plans are in place to appoint administrators to observe troubled microfinance institutions (MFIs) in the country. MRA currently has the authority to remove chairpersons and chief executive officers found guilty of financial or administrative irregularities, but it lacks the power to appoint replacements. According to a statement attributed to MRA Executive Vice Chairman Khandakar Muzharul Haque, existing laws will not need to be amended in order to allow the MRA to have the authority to appoint replacements for such executives; A circular by the ministry of finance would be sufficient to make such a change. The names of the MFIs have not been released.
MRA has reportedly repealed the licenses of 12 MFIs in the first quarter of 2012 for infractions including deceiving clients, failing to contribute to poverty alleviation and not working in accordance with the declarations made at the time of license.
MRA acts as the supervisor of nonprofit MFIs in Bangladesh.
By Charlotte Newman, Research Associate
About Microcredit Regulatory Authority
The Microcredit Regulatory Authority monitors and supervises microfinance operations of non-government organizations of Bangladesh. It is created by the Government of Peoples’ Republic of Bangladesh under the “Microcredit Regulatory Authority Act”. A license from the Authority is mandatory to operate microfinance operations in Bangladesh as an NGO. The Authority’s responsibilities include licensing microfinance operations, ensuring license compliance and enforcing sanctions.
Sources and Additional Resources:
Financial Express: “MRA to Get Authority to Appoint Administrators in Troubled MFIs,” http://www.thefinancialexpress-bd.com/more.php?news_id=129435&date=2012-05-12
MicroCapital.org story, April 7, 2012, “MICROCAPITAL BRIEF: Nigeria Deposit Insurance Corporation (NDIC) Launches Investigation into Managers, Directors of Distressed Microfinance Banks,” https://www.microcapital.org/microcapital-brief-nigerian-deposit-insurance-corporation-ndic-launches-investigation-into-managers-directors-of-distressed-microfinance-banks/
MicroCapital.org story, March 6, 2012, “MICROCAPITAL BRIEF: Bangladeshi Microfinance Borrowers Earn $47m in Interest on Mandatory Savings; Microcredit Regulatory Authority to Boost Enforcement of Required Interest Payments by MFIs,” https://www.microcapital.org/microcapital-brief-bangladeshi-microfinance-borrowers-earn-47m-in-interest-on-mandatory-savings-microcredit-regulatory-authority-to-boost-enforcement-of-required-interest-payments-by-mfis/
MicroCapital Universe Profile: Microcredit Regulatory Authority
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Regulatory+Authority
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