The Microcredit Regulatory Authority (MRA), a government body that oversees the nongovernment microfinance institutions (NGO-MFIs) in Bangladesh, reportedly has rescinded the licenses of 46 microfinance institutions (MFIs) in the country for being in violation of “existing directives in running their operations” [1]. Although details of the specific grounds for canceling the licenses have not been announced, MRA has revealed that most of the MFIs affected by the action have “misused funds through breach of rules.” MRA is also in the process of canceling the licenses of an unspecified number of additional MFIs. In 2013, MRA canceled the licenses of 24 NGO-MFIs.
As of June 2013, MRA reported 698 licensed NGO-MFIs serving approximately 25 million clients in the country with total outstanding loans of BDT 257 billion (USD 3.3 billion) and total deposits of BDT 94 billion (USD 1.2 billion) [2].
By Nisha Koul, Research Associate
About Microcredit Regulatory Authority (MRA): The Microcredit Regulatory Authority (MRA) is Bangladesh’s primary regulator over the activities of NGO microfinance institutions (MFIs). MRA has three primary functions: to license MFIs, to supervise MFIs for compliance with licensing requirements and to enforce sanctions in cases of non-compliance. In addition, MRA conducts audits and addresses customer complaints. The board of directors of MRA consists of government officials including the governor of Bangladesh Bank. As of June 2013, MRA reported 698 licensed NGO-MFIs serving approximately 25 million clients with total outstanding loans of BDT 257 billion (USD 3.3 billion) and total deposits of BDT 94 billion (USD 1.2 billion).
Sources and Additional Resources:
[1] The Financial Express, 50 Micro-lenders Lose Licenses
[2] Microcredit Regulatory Authority, Publications, Microcredit in Bangladesh
MicroCapital Story, May 6, 2014, Dynamic Effects of Microcredit in Bangladesh,” Published by the Development Research Group of the World Bank
MicroCapital Story, January 25, 2013, Microcredit Regulatory Authority (MRA) of Bangladesh Plans to Lower 27% Microcredit Interest Rate Cap
MicroCapital Story, May 16, 2013, Bangladeshi Microfinance Institutions Boost All-Time Microcredit Disbursals to $2.7b
MicroCapital Universe Profile, Microcredit Regulatory Authority (MRA)
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