Civil-society organisations (CSOs) on Tuesday demanded scrapping of the proposed the 'Microcredit Bank Ordinance 2025', which was introduced by the interim government to bring microfinance institutions under a banking framework in the name of regulation.
At a press conference, they described the ordinance as a "blueprint to dismantle" the country's microfinance system under the guise of banking reform.
COAST Foundation, EquityBD and the BDCSO Process jointly organised the press conference titled 'Risks of transforming microcredit into a banking framework', at the National Press Club in the city, with COAST Foundation Executive Director Rezaul Karim Chowdhury in the chair.
The speakers urged the government to strengthen microfinance institutions (MFIs) financially by expanding savings opportunities instead of introducing new risks through the ordinance.
They also recommended provisions for filing certificate cases under the Public Demand Recovery Act-1991 to prevent fund misappropriation.
The experts further stressed that regulatory oversight of the sector should not be transferred to Bangladesh Bank.
Instead, existing bodies, including the Microcredit Regulatory Authority (MRA), Palli Karma-Sahayak Foundation (PKSF) and the NGO Affairs Bureau, should be strengthened within their respective mandates, they added.
Syed Aminul Haque, Director of Microfinance at COAST Foundation; Omar Faruk Bhuiyan, Coordinator of EquityBD; and M. A. Hasan of the BDCSO Process, spoke at the event. The keynote paper was presented by Mostafa Kamal Akand of BDCSO Process.
Rezaul Karim Chowdhury said development should focus on empowering people, ensuring dignity and securing livelihoods, rather than merely expanding infrastructure or bank balances.
He questioned whether banks could mobilise foreign funding in the same way NGOs do for health, education and climate-related programmes.
He also noted that while commercial banks in Bangladesh have a non-performing loan (NPL) ratio of around 35 per cent, MFIs maintain a significantly lower rate of 8-9 per cent.
There is no record of microfinance funds being siphoned abroad, he added, noting that banks increasingly view investment in MFIs as one of the safest options.
Highlighting the sector's impact, he said microfinance has strengthened self-reliance among millions, empowered women and energised the rural economy.
Syed Aminul Haque said there was little justification for bringing MFIs under a banking framework when 56 banks are already in operation.
He warned that banks are primarily profit-driven and often influenced by political considerations, which could create future risks.
He also criticised the drafting process of the ordinance, saying that despite the presence of around 700 NGOs in the country, it was prepared without broad consultation and relied on input from a limited number of large NGOs and corporate entities.
Mostafa Kamal Akand warned that transforming microcredit into a profit-driven banking model could undermine its core objectives of poverty alleviation and social development, potentially leaving marginalised communities underserved.
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