Nearly 700 plus microcredit organizations in Bangladesh are operating without any authorization or approval. According to a press release on the Bangladesh online news portal bdnews24.com, this announcement was made by Enamul Huq Mustafa Shahid, the Social welfare Minister of Bangladesh. Mr. Shahid stated that this issue concerning unauthorized microcredit organizations in operation would first be raised before the Cabinet following which an investigating body would be formed by the Parliament to look into the activities of all non-government organizations (NGOs) in the country registered with different agencies. Bdnews24 is Bangladesh’s first online newspaper managed by former BBC broadcaster and journalist Toufique Imrose Khalidi in partnership with Reuters.
Out of a total 1.5 lakh NGOs in Bangladesh, 1864 NGOs are engaged in micro-credit programs with 744 of them involved in micro-credit programs without any proper authorization. Stating that some unauthorized NGOs are taking advantage of the ‘economic weakness and helplessness’ of Bangladeshis, Mr. Shahid called for the need to ‘bring all NGOs under proper regulation with the cooperation of all [ministries]’ and said that ‘legal steps’ would be taken against all NGOs operating microcredit programs without authorization. However, no information on the names of the unauthorized NGOs in operation is publicly available.
The Minister’s comments and the Government’s measures for increased scrutiny follow the crackdown on the UK based social development NGO Green Crescent which was illegally operating an orphanage-cum-madrasa (Muslim school) in Bangladesh. As per this March 2009 news release on the Asia News Network, Bangladeshi officials seized illegal arms, ammunition and explosives from the Green Crescent premises in SouthWest Bangladesh. Further, Green Crescent had also expanded its programs in Bangladesh without government permission, foraying into activities other than the ones it had registered for with the Government, namely, social development and economic self-reliance for the poor, literacy and health service. For more information on the case, please lookup this press release on the AsiaNews Network. Mr. Shahid acknowledged that following the Green Crescent incident, the Bangladeshi government has been discussing means ‘to take quick measures with different ministries’ and closely investigate activities of all unauthorized microcredit organizations in Bangladesh.
Aside of the Ministry for Social Welfare, NGOs in Bangladesh are also registered, among other agencies, with the NGO Affairs Bureau, the Cooperatives Directorate, the Women’s Affairs Directorate and the Microcredit Regulatory Authority (MRA) controlled by the Bangladesh Bank. Commenting on the issue of NGOs registered with different agencies, Mr. Shahid stated that all NGOs would have to be brought under common regulation with the cooperation and participation of all associated agencies.
NGOs registered with the Ministry for Social Welfare are not allowed to carry out microcredit programs, whereas the MRA requires organizations to have a minimum of 1000 borrowers and approximately USD 58,000 worth of credit to obtain license to carry out microcredit operations. With regard to NGOs registered with the MRA, Mr. Shahid had this to say: ‘The majority of organizations which are engaged in such [micro-credit] programs are registered by the MRA’. It is, however, not clear from this comment by Mr. Shahid if the NGOs registered by the MRA were in fact unauthorized to carry out microcredit programs in Bangladesh.
By Bharathi Ram, Research Assistant
Additional Resources:
Bdnews24: Home, About Us, Hundreds of illegal micro-credit operators at work
Asia News Network: Home, Press Release: UK Based NGO ran illegally in Bangladesh
Microcredit Regulatory Authority
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