Dhaka, Bangladesh (BBN)- The Micro-credit Regulatory Authority (MRA) will seek fresh applications from micro-finance institutions (MFIs) to issue licences from January 2010, officials said.
The country’s micro-credit watchdog body also formed a six-member committee to formulate a guideline to regulate wholesale micro-credit operation of the MFIs, or of the non-governmental organizations (NGOs) and banks which provide loans only to other MFIs.
The decisions were taken at a meeting held at the Bangladesh Bank (BB) Sunday with MRA Chairman and BB Governor Atiur Rahman in the chair.
The MRA also decided to hold an international conference on MFIs regulations in the city on March 2010, where local and foreign experts and researchers will be invited.
“We’ll issue fresh licences to the MFIs to bring their operations under a regulatory framework,” a MRA senior official said, adding that the authority has decided to settle all the pending applications for licences by December this year.
The MRA earlier extended the timeframe of issuing licences to the MFIs until December 31 this year instead of June 30 for running their operations.
“We’ll issue licences to the MFIs after verification of their submitted documents by the deputy commissioners concerned along with other agencies to ensure authenticity,” the official said.
The concerned authorities earlier set the criteria for an MFI to have minimum 1,000 borrowers involving credit worth Tk 4.0 million as pre-requisite to obtain licence.
The MRA has already issued 453 licences to the MFIs from among 4,420 applications, submitted to the central bank, seeking permission for micro-credit operation.
“Around 1,500 applicant MFIs are now waiting for licences,” the officials said, adding that the MRA is closely monitoring the operation of MFIs to ensure their accountability and transparency.
Each MFI must obtain licence as a mandatory requirement of the Micro-credit Regulatory Act to operate in the country.
“The MRA will introduce a guideline on wholesale micro-credit operation, mentioning interest rate on such lending in line with the committee’s recommendations,” MRA officials said, adding that some NGOs and commercial banks are now providing micro-credit on wholesale basis to other MFIs.
The government earlier formed an eight-member MRA, headed by the central bank governor, to issue licences to all private MFIs for ensuring their transparency and accountability.
Micro-credit operation of Grameen Bank and NGOs like BRAC, ASA and Proshika has spread across the country. These three NGOs and Grameen Bank together account for almost 80 per cent of total market share of micro-credit both in terms of coverage and disbursement.
BBN/SS/SI/AD-03August09-1:04 am (BST)