MRA plans to develop micro entrepreneurs

The Microcredit Regulatory Authority (MRA) has taken a move to define micro enterprises as part of its plan to promote selective microcredit clients and help them graduate to micro entrepreneurs.
The regulator formed a committee, headed by an MRA director, to define the micro enterprises.
Currently, some 28 per cent small borrowers in the country's micro finance institutions (MFIs) are considered as micro-enterprises, according to MRA.
 "There is no unified definition for the micro enterprises," MRA Director Shazzad Hossoin told the FE. Some MFIs consider small borrowers as micro enterprises who borrow Tk 30,000 and above, some prefer to put the figure at Tk 50,000 and above, and some others consider it to be above Tk 100,000. He said that the microcredit has achieved a lot in reducing poverty and 'now it's the time to move the next stage'.
The regulator has also planned to allow MFIs to increase their respective lending limit up to 60 per cent of their total credit exposure to the micro enterprises from existing 50 per cent.
"The existing practice of microcredit is very traditional. We have been running this programme for many years," said Mr Hossoin, adding that most of the beneficiaries of the programmes were individuals and, in many cases, they used the loans to meet the personal expenses.
"The real purpose of microcredit is not served by such system. We should change it. Some microcredit clients claim they've graduated to become micro entrepreneurs, but those are not at the desired level," he said.
According to Bangladesh Bank's definition, micro industry/enterprise will be the one having assets worth Tk 0.5 million to Tk 5.0 million and/or employing 10 to 24 workers.
In a service industry and in a business, micro enterprises will be the ones employing 10 or less people and have assets worth Tk 0.5 million or less. Earlier, the MRA took an initiative with the help of Department for International Development (DFID) of UK to implement a graduation plan for the micro borrowers.  
According to the plan, three or five selective clients from a group of 30 will be promoted to micro entrepreneurs.
Mr. Hossoin said MFIs will select the deserving clients, who will also employ some of their group members, so that other members could benefit from the new initiative.
At present, there are more than 20 million borrowers and 26 million members with outstanding loans of around Tk 420 billion.
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