Gazi Anowarul Hoque :
As many as ten micro-finance institutions (MFIs) have lost their licenses following gross irregularities in their credit activities, sources said.
The Microcredit Regulatory Authority (MRA) in the last few months have been keeping their close eye on the MFIs and found gross irregularities in different stages of their activities and cancelled the licenses in the last two months, the sources added.
Voluntary Association for Rural Development Project (VARP), Basantapur Polli Sheba Sangstha, Society for Peace and Charity, MSP – Microcredit Program, Integrated Social Aid, Gono Progoti, Social Advancement and Village Economy (SAVE), People for People, Society Exhort Relation and Vocational Education (SERVE), and Poverty Reduction Education to Maximize Integrated Socio Economic Development are among the organizations those have faced their licenses cancellations.
With these new cancellations, the number of MFIs operating in the country now stands at 686. The sector at present has 20 million borrowers and 26 million members with total outstanding loans amounting to Tk 350 billion.
MRA has cancelled licenses of 74 MFIs since 2011. Of these eight were cancelled in 2015, 16 in 2014, 19 in 2013, 17 in 2012 and four in 2011.
“MRA wants to create a conducive and healthy environment in the micro-finance sector, through abolishing bad or poor-managed organisations to help eradicate poverty, contribute to achieve Sustainable Development Goals (SDGs) and foster sustainable development in the country,” said MRA Director Shazzad Hossain while talking about the license termination.
He said the regulator has awarded 204 more primary licenses to NGO-MFIs for the areas, where no or a small number of NGO-MFIs are working, to ensure smooth distribution of micro-finance there. They will be awarded final licence after three years.
Hossain also said MRA wants to ensure depositors’ safety, and operations of the cancelled MFIs were not satisfactory. Some of these were involved in irregularities, while some failed to improve their condition even after repeated warnings from the regulator.
MRA is showing zero tolerance about irregularities and corruptions in the MFIs. But the regulator is also ensuring that depositors and beneficiaries do not suffer for closure of MFIs.
“So we’ve shifted their clients to other MFIs, who are running their operation in nearby areas,” he added.
Another high official of MRA said that the MFIs were largely involved with different types of irregularities. But after formation of MRA they are now gradually improving quality of their services.
“We do not dream to bring system in all the MFIs in a day or twice, we are trying to wash out the irregularities gradually. Those who do not try to improve the situation will face cancellation,” he added.
“Our drive against irregularities will be continued until a satisfactory level of service are ensured,” the MRA high official informed.
As many as ten micro-finance institutions (MFIs) have lost their licenses following gross irregularities in their credit activities, sources said.
The Microcredit Regulatory Authority (MRA) in the last few months have been keeping their close eye on the MFIs and found gross irregularities in different stages of their activities and cancelled the licenses in the last two months, the sources added.
Voluntary Association for Rural Development Project (VARP), Basantapur Polli Sheba Sangstha, Society for Peace and Charity, MSP – Microcredit Program, Integrated Social Aid, Gono Progoti, Social Advancement and Village Economy (SAVE), People for People, Society Exhort Relation and Vocational Education (SERVE), and Poverty Reduction Education to Maximize Integrated Socio Economic Development are among the organizations those have faced their licenses cancellations.
With these new cancellations, the number of MFIs operating in the country now stands at 686. The sector at present has 20 million borrowers and 26 million members with total outstanding loans amounting to Tk 350 billion.
MRA has cancelled licenses of 74 MFIs since 2011. Of these eight were cancelled in 2015, 16 in 2014, 19 in 2013, 17 in 2012 and four in 2011.
“MRA wants to create a conducive and healthy environment in the micro-finance sector, through abolishing bad or poor-managed organisations to help eradicate poverty, contribute to achieve Sustainable Development Goals (SDGs) and foster sustainable development in the country,” said MRA Director Shazzad Hossain while talking about the license termination.
He said the regulator has awarded 204 more primary licenses to NGO-MFIs for the areas, where no or a small number of NGO-MFIs are working, to ensure smooth distribution of micro-finance there. They will be awarded final licence after three years.
Hossain also said MRA wants to ensure depositors’ safety, and operations of the cancelled MFIs were not satisfactory. Some of these were involved in irregularities, while some failed to improve their condition even after repeated warnings from the regulator.
MRA is showing zero tolerance about irregularities and corruptions in the MFIs. But the regulator is also ensuring that depositors and beneficiaries do not suffer for closure of MFIs.
“So we’ve shifted their clients to other MFIs, who are running their operation in nearby areas,” he added.
Another high official of MRA said that the MFIs were largely involved with different types of irregularities. But after formation of MRA they are now gradually improving quality of their services.
“We do not dream to bring system in all the MFIs in a day or twice, we are trying to wash out the irregularities gradually. Those who do not try to improve the situation will face cancellation,” he added.
“Our drive against irregularities will be continued until a satisfactory level of service are ensured,” the MRA high official informed.
