The Microcredit Regulatory Authority (MRA), a Bangladeshi government body that oversees the operations of nongovernmental organization (NGO) microfinance institutions (MFIs), reportedly has issued a warning to MFIs in the country in response to violations of MRA regulations such as the requirement of a 15-day grace period on new loans before collecting loan repayments as well as the use of a declining-balance method of calculating interest. This method entails the borrower paying periodic interest on the unpaid portion of the loan as opposed to the original amount borrowed. MRA reportedly will punish any MFI that is found to be in violation of these MRA rules, although the nature of this punishment has not been disclosed.
By Sarah Luo, 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 heads of executive levels of government including the governor of Bangladesh Bank, Dr Atiur Rahman who serves as chairman of the board.
Financial Express: http://www.thefinancialexpress-bd.com/2014/08/19/51149
MicroCapital January 25, 2013: Microcredit Regulatory Authority (MRA) of Bangladesh Plans to Lower 27% Microcredit Interest Rate Cap
MicroCapital Universe Profile: Microcredit Regulatory Authority (MRA)
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