MRA helps MFIs raise loan disbursement

Loan disbursement of top 20 non-government organisations-microfinance institutions (NGOs-MFIs) increased significantly by 188 per cent in last 5 years since the formation of regulator Microcrdit Regulatory Authority (MRA)
These top 20 NGOs-MFIs disbursed Tk 566.77 billion in 20 years before the formation of the MRA in 2007. Their loan disbursement reached Tk 1,632.93 billion in next 6 years, according to the annual report of the MRA 2012 published recently.
The MFIs are BRAC, Association for Social Advancement (ASA), Bureau Bangladesh, Thengamara Mohila Sabuj Sangha (TMSS), Jagorani Chakra Foundation, Society for Social Service (SSS), Shakti Foundation, Proshika Manobik Unnayan Kendra, Uddipan, Padakhep Manabik Unnayan Kendra, Rangpur Dinajpur Rural Service (RDRS), Palli Mangal Karmasuchi, Caritas Bangladesh, Sideep, Sajeda Foundation, Christian Service Society (CSS), Rural Reconstruction Foundation(RRF), Resource Integration Centre(RIC), People's Oriented Program Implementation(POPI) and Dusto Sastho Kandro(DSK).
Among the 20 MFIs, BRAC and ASA hold 42 per cent of the total market and 73 per cent of the top 20.
The rate of increase of loan disbursement was 29.81 per cent in 2007-08, 24.89 per cent in 2008-09, 22.36 per cent in 2009-10, 20.48 per cent in 2010-11 and 20.54 per cent in 2011-12.
"The significant increase of loan disbursement in five years is because of the formation of the Microcredit Regulatory Authority," said Abu Farha Md. Nasser, Director-1 of the MRA told the FE Thursday.
He said the MRA brought the entire NGO-MFI sector under strict regulation, took steps to mobilise more funds and formulated inclusive policies that succeeded in raising loan disbursement.
However, the biggest and pioneer NGO-MFI Grameen Bank is out of the MRA regulation as it was recently shifted to the  Bangladesh Bank for supervision.
Noted economist Ahsan H Mansur, however, differed from the MRA Director's observation.
He said the increase in loan disbursement is very normal.
With a view to bringing the NGOs-MFIs under a regulatory framework, the government in July 2006 enacted 'Microcredit Regulatory Authority Act, 2006' (Act No. 32 of 2006) which came into force from August 27, 2006.
Under the Act, the government established the MRA to ensure transparency and accountability of microcredit activities of the NGOs-MFIs in the country.
After the formation of the MRA, around 4,500 NGOs-MFIs showed interest for licence though most of them have not qualified.
Currently, 730 NGOs-MFIs are licensed under the MRA and 500-600 more are going to be added to the list.
The Authority is empowered and responsible for implementing the Act and for bringing the microcredit sector of the country under a full-fledged regulatory framework.
The Authority has also the mandate and power to take punitive measures if any institution does not comply with any of the provisions of law and rules of the MRA.
It has recently cancelled licences of a number of NGOs-MFIs for irregularities.