Mohammed Yunus, the founder of Grameen Bank, a microfinance institution (MFI) located in Bangladesh, recently was reported to have said that the Microcredit Regulatory Authority (MRA), Bangladesh’s primary regulator over the microfinance activities of all non-governmental organization (NGO) microfinance institutions (MFIs), should introduce a standardized maximum interest rate that can be charged by MFIs. Professor Yunus also suggested that MRA strictly define “microcredit” to exclude organizations that loan against collateral, lend to middle-income clients or provide loans intended for the purchase of consumer goods. He also stressed Bangladesh’s role as a world leader in microfinance. These comments were made at a conference entitled “Microfinance Regulation: Who Benefits?” held in Dhaka, Bangladesh.
By Christopher Maggio, Research Assistant
About
Grameen Bank
Description
Grameen Bank is a Bangladeshi microfinance institution that provides collateral-free loans to poor entrepreneurs in rural areas. It was founded in the late 1970’s by Mohammed Yunus, who, along with Grameen Bank, won the 2006 Nobel Peace Prize for their work in developing the concept of microfinance. As of February 2010, it reports 8 million borrowers, 97 percent of whom are women. With 2,563 branches, Grameen Bank provides services to 81,343 villages. Grameen Bank has the equivalent of USD 1.2 billion in assets.
About:
Microcredit Regulation Authority (MRA)
Description
The Microcredit Regulatory Authority (MRA) is Bangladesh’s primary regulator over the microfinance activities of all NGO micofinance institutions (MFIs). It has three primary functions: to license MFIs, to supervise MFIs for compliance with licensing requirements and to enforce sanctions in response to instances of 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 the Chairman of MRA.
Contact Information
Microcredit Regulatory Authority
62/3 Purana Paltan
National Sports Council (NSC) Tower, 11th Floor
Dhaka – 1000
Tel: +88 02 9514652 54
Fax +88 02 9559756
Additional Resources:
Daily Star article entitled ‘Yunus calls for standardised interest rate’: http://www.thedailystar.net/newDesign/news-details.php?nid=130544
bdnews24.com article entitled ‘Yunus calls for microcredit rate cap’: http://bdnews24.com/details.php?id=156041&cid=4
MicroCapital’s Microfinance Universe profile: Grameen Bank
MicroCapital’s Microfinance Universe profile: MRA
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