Microfinance institutions disbursed a total of Tk2.49 trillion in loans in FY23, marking a 26.41-percent increase from the previous fiscal year, according to the Microcredit Regulatory Authority (MRA).
The microcredit regulator says the growth reflects the expanding reach of microfinance in empowering communities in Bangladesh and fostering the country's economic upturn.
Apart from the increase in loan disbursements, microfinance institutions also witnessed a robust rise in savings mobilisation, with clients depositing Tk620.55 billion in FY23, representing a 25.16 per cent increase from FY22.
At an annual statistics workshop in Dhaka on Sunday, the regulator interprets this surge in savings to the growing confidence of the populace in the microfinance sector.
The workshop, titled 'Microfinance in Bangladesh', revealed loan outstanding (existing loans to borrowers) stood at over Tk 1.50 trillion in FY23.
The annual report was presented by Mohammad Yakub Hossain, executive director of the MRA.
Microfinance institutions play a vital role in providing financial services nationwide, with a focus on financial inclusion as well as contributions to health, education, higher education scholarships and disaster management.
As the chief guest of the event, Financial Institutions Division Secretary Sheikh Mohammad Salim Ullah emphasised the importance of highlighting positive stories within the microfinance sector.
"We should showcase successful and impactful initiatives within the sector to inspire further positive developments," he said.
Salim also stressed the need to alleviate the suffering of individuals involved in the sector to address the challenges and hardships they face, with the aim of enhancing the overall growth of the sector.
MRA Executive Vice Chairman Md Fashiullah, who chaired the event, said, "Our efforts extend beyond financial services, as we actively work to raise awareness about crucial issues, including vaccination."
He mentioned that the Microfinance Credit Information Bureau (MF-CIB) is set to be formed shortly. He also shared that the MRA is going to develop common operating software for integrated microfinance solutions soon.
Microfinance institutions also achieved a 98 per cent loan recovery rate for the loans disbursed to their clients in FY23, according to the regulator's data.
The data, covering the period up to June 2023, broast the active involvement of women in this sector, comprising 91 per cent of the loan recipients.
Of the total loan, around Tk 1.05 trillion or 42 per cent, have been distributed as microloans in the microfinance sector in the fiscal year 2022-23. Besides, the institutions disbursed over Tk 1.24 billion to the agricultural sector, comprising 50 per cent of the overall loans distributed.
Currently, there are 731 MRA-certified institutions operating through nearly 25,000 branches, reaching nearly 40 million marginalised individuals across the country.
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