Moody’s Investors Services, a US-based rating and research agency that has assigned a ‘Ba3’ rating to Bangladesh’s investment environment, recently touted microfinance institutions (MFIs) in Bangladesh for supporting the country’s socioeconomic development [1]. The ‘Ba3’ rating connotes a stable outlook for Bangladesh’s future economic performance and may boost foreign direct investment. Accordingly, Moody’s stated in its assessment that “exports and remittances have underpinned an improvement in the country’s balance of payments and microfinance has established a critical social safety net that offsets the vagaries of a subsistence level per capita income.” Moody’s observation comes at a time when the microfinance sector is undergoing scrutiny regarding whether it reduces poverty [2, 3]. In 2009, MFIs in Bangladesh submitting data to the US-based nonprofit Microfinance Information Exchange (MIX) reported total aggregate assets of USD 3.5 billion, an aggregate gross loan portfolio of USD 2.3 billion and 20.6 million borrowers.
By Jacqueline Foelster, Research Associate
Source and Additional Resources:
[1] The Daily Star, April 19, 2011, “Moody’s hails microlenders”, http://www.thedailystar.net/newDesign/news-details.php?nid=182173
MicroCapital.org Brief, April 5, 2011, “Shahid Khandkher, Hassan Zaman Argue that Microfinance Has Advanced Bangladesh But Cannot Eliminate Poverty in Any Country”, https://www.microcapital.org/microcapital-brief-shahid-khandker-hassan-zaman-argue-that-microfinance-has-advanced-bangladesh-but-can-not-eliminate-poverty-in-any-country-2/
MicroCapital.org Brief, January 25, 2011, “Microfinance Under Scrutiny – Arguments For and Against From the Daily Star of Bangladesh and Forbes Magazine”, https://www.microcapital.org/microcapital-brief-microfinance-under-scrutiny-arguments-for-and-against-from-the-daily-star-of-bangladesh-and-forbes-magazine/
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