MICROCAPITAL BRIEF: Microcredit Regulatory Authority (MRA) of Bangladesh Launches Lead Microfinance Institution System to Coordinate Poverty-reduction Programmes

The Microcredit Regulatory Authority (MRA), a Bangladeshi government body that oversees the operations of nongovernmental organization (NGO) microfinance institutions (MFIs), reportedly is planning the launch of a Lead Microfinance Institution System to coordinate government-funded poverty reduction programmes at the ground level. [1] The model replicates the Lead Bank System present in the country, where a lead bank oversees the arrangement of loan syndications. One goal of this new system is to reduce possible overlaps among international and domestic poverty-reduction programmes that are active in the country. MRA Director Sazzad Hossain also offered the following example of what a lead MFI would do: “Suppose, 200 people are eligible for credits in an upazila, but under the existing system 150 people are getting the credit facilities. The lead MFI will find out why the rest are not under MFI credit programme.”

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 Julia Marín, Research Associate

About Microcredit Regulatory Authority (MRA)

The Microcredit Regulatory Authority (MRA) monitors and supervises microfinance operations of non-government organisations in Bangladesh. It was created by the government of the Peoples’ Republic of Bangladesh under the “Microcredit Regulatory Authority Act” of 2006. 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, the country’s Central Bank Authority. 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, Lead MFIs envisaged for taking anti-poverty drive into top gear

[2] Microcredit Regulatory Authority, Publications, Microcredit in Bangladesh

MicroCapital, September 7, 2014, Microcredit Regulatory Authority (MRA) of Bangladesh Warns of Punishment for Non-compliant MFIs

MicroCapital, August 1, 2014, Microcredit Regulatory Authority (MRA) of Bangladesh Cancels Licenses of 46 Microfinance Institutions Claiming Misuse of Funds

MicroCapital, January 25, 2013, Microcredit Regulatory Authority (MRA) of Bangladesh Plans to Lower 27% Microcredit Interest Rate Cap

MicroCapital Universe Profile: Microfinance Regulatory Authority (Bangladesh)

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