The Microcredit Regulatory Authority (MRA) of Bangladesh will reportedly create a security fund for the benefit depositors of microfinance institutions (MFIs) in the country. Index Capital Group, acting as a consultant to MRA, recently made a presentation on the proposed fund, which would cover BDT 3,500 (USD 43) per depositor, which is enough to safeguard the interest of 80 percent of the depositors. MFIs will pay into the system at a rate based on their assigned level of risk: low, medium (upper tier), medium (lower tier) or high.
According to a statement attributed to Finance Minister Ama Muhith, there are over 3,000 MFIs operating in Bangladesh, but only 600 are registered with MRA. Atiru Rahman, Governor of the central Bangladesh Bank, reportedly said the registered MFIs have 10 million clients with BDT 300 billion (USD 360 million) in deposits. A survey conducted by the Index Capital Group on 517 MFIs showed that 49 of them would fall in the low-risk category, 202 in medium-risk (upper tier), 216 in medium-risk (lower tier) and 50 in the high-risk category.
By Mihaela Grindeanu, Research Associate
Sources and Additional Resources
Bdnews24.com story: “’Security fund’ for MFI depositors mulled”, http://www.bdnews24.com/details.php?id=228664&cid=4
MicroCapital.org story, June 3, 2012: “MICROCAPITAL BRIEF: Bangladesh Finance Minister: Management Structures in Microfinance Sector Too Dependent on Founders”, https://www.microcapital.org/microcapital-brief-bangladesh-finance-minister-management-structures-in-microfinance-sector-too-dependent-on-founders/
MicroCapital.org story, May 21, 2012: “MICROCAPITAL BRIEF: Microcredit Regulatory Authority (MRA) of Bangladesh Orders Microfinance Institutions to Obtain Permission to Offer Services Other Than Microcredit”, https://www.microcapital.org/microcapital-brief-microcredit-regulatory-authority-mra-of-bangladesh-orders-microfinance-institutions-to-obtain-permission-to-offer-services-other-than-microcredit/
MicroCapital.org story, May 19, 2012: “MICROCAPITAL BRIEF: Microcredit Regulatory Authority of Bangladesh Revokes Licenses of 12 Microfinance Institutions, to Deploy Observers to Others”, https://www.microcapital.org/microcapital-brief-microcredit-regulatory-authority-of-bangladesh-revokes-licenses-of-12-microfinance-institutions-to-deploy-observers-to-others/
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