102 NGO MFIs out of 750 fail to submit annual financial reports

Ismail Hossain
Some 102 nongovernmental organisation (NGO) microfinance institutions (MFIs) of the total 750 have failed to submit their annual audited financial reports for 2022-23 to the regulator even after four months have passed since the September deadline.
Both the MFIs and the regulator Microcredit Regulatory Authority (MRA) have blamed the high fees charged by chartered accountants, which are particularly burdensome for smaller NGO-MFIs.
These institutions also claim that CA firms are unwilling to dedicate time to auditing smaller MFIs.
KAMM Raisul Islam, director of the On-site Supervision Department at the MRA, said this issue has persisted for several years.
"While we have not formally investigated the reasons behind the late submissions, many MFIs cite high audit fees and a lack of available firms to audit the large number of MFIs," he said.
Mr Islam said the MRA is going to meet with the Institute of Chartered Accountants of Bangladesh (ICAB) to discuss the issue. They will request the ICAB to consider offering different fee structures for smaller MFIs.
MFIs are obligated to file these mandatory reports within three months of the fiscal year's end, which is by the last day of September. Last year, the MRA cancelled the licences of several MFIs for failing to submit their audited reports.
Following unsuccessful attempts at communication, the MRA launched an investigation into these MFIs.

Murshed Alam Sarker, chairman of the Credit and Development Forum (CDF), previously said that exorbitant audit fees are a major obstacle for smaller NGO-MFIs in complying with mandatory audits.
He urged the ICAB to reduce fees for smaller organisations.
The MRA prioritises the eradication of poverty, protection of client interests and fostering sustainable development of the country by ensuring transparency in MFI operations and their accountability.
The number of micro-credit beneficiaries has risen in recent years mainly due to the government's policy support, according to a senior MRA executive.
MRA recently invited applications for providing new licences of MFIs following rising interest among new NGOs.
The NGOs that are registered under any of these laws - the Societies Registration Act, the Trust Act 1882, the Voluntary Social Welfare Agencies (Registration and Control) Ordinance 1961, and the Company Act 1994 - can apply for the licence.
Currently, the registered MFIs are serving more than 40 million of the country's 170 million people.
The MRA is the central body to monitor and supervise microfinance operations in the country.
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