Lead MFI to rule over rural anti-poverty drive

A new agency styled 'Lead MFI (micro-finance institution) System' is in the offing to coordinate poverty-reduction programmes at the root level.
Officials said the Micro-credit Regulatory Authority (MRA) is going to introduce the Lead MFI System with a view to running the poverty-alleviation drive in a cohesive manner.     
The regulator has prepared an action plan for the new model. The next board meeting of MRA will approve the model.  
"We have prepared the draft model to introduce the system in January next year," Md. Shazzad Hossoin, Director of the MRA, told the FE Friday.
Lead MFI System is a kind of replication of Lead Bank System. Under the system, a leading MFI coordinates the poverty-reduction programmes at the upazila level.
Lead Bank System is being practiced in banking where a bank oversees the arrangement of loan syndication. The lead bank is paid an additional fee for this service, which involves recruiting the members and negotiating the financing terms.
Mr Shazzad Hossoin said the difference is here that the Lead MFI will not oversee only loan but also other poverty programmes.
MRA will select lead MFI in an upazila for coordinating the programmes.
"The lead MFI will find out if anybody is left out but eligible to be under MFI credit programme. Say, 200 people are eligible for credits in an upazila, but under the existing system 150 are getting the credit facilities. The Lead MFI will include those left out but are in need, and they must get credits," Mr. Hossoin said to explain the system.     
The MRA has organised meetings with stakeholders before finalizing the Lead MFI System. After necessary modifications, the regulator hopes it to be introduced from January.  
The MRA director said the Lead MFI will coordinate with other poverty-eradication programmes initiated by government agencies and other national and international agencies so that the programmes are not overlapped.
"I'm sure once the programme is introduced, the micro-credits will reach a new height," he said.
Currently, 699 MFIs are registered with the MRA. These registered NGOs are serving more than 40 million out of the country's 160 million people.
Currently, MFIs under the MRA have Tk 300 million outstanding loans. The number of total clients of this sector is 35 million. The MRA is now in a process of granting licences to 200 more MFIs.
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