Another band of 179 NGOs bag licence for microcredit operations

Ismail Hossain | Published: July 02, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

A new band of 179 non-governmental organisations (NGOs) have got licence conditionally for three years to run microcredit operations in 37 districts having higher incidence of poverty. Â
Two prime ones of the conditions given to them by the Microcredit Regulatory Authority (MRA) in issuing the licences are: Tk 5 million outstanding small loans and 1000 borrowers within this licensing timeframe, officials said.
"If they can fulfil the conditions successfully within this time, after three years they would be given permanent licence," MRA Director Shazzad Hossoin told The Financial Express.
The microfinance regulator invited applications on November 16 in 2011 from interested organisations in 37 relatively less-developed districts. And the selected applicants have been issued licences up till July 01, 2015 since late last year.Â Â
The less-fortunate districts selected are Barisal, Jamalpur, Khagrachhari, Bhola, Mymensingh, Barguna, Khulna, Sherpur, Bagerhat, Jhalakathi, Habiganj, Bandarban, Sirajganj, Sunamganj, Satkhira, Patuakhali, Rangamati, Lalmonirhat, Jessore, Kurigram, Brahmanbaria, Rangpur, Chuadanga, Nilphamari, Natore, Cox's Bazar, Gopalganj, Faridpur, Netrakona, Comilla, Kishoreganj, Rajbari, Bogra, Noakhali, Chapainawabganj, Madaripur and Thakurgaon. The MRA has marked out the areas to avoid overlapping of small lending-borrowing services and also to help meet government goals of poverty reduction.
In 2013, the microcredit regulator made 'primary selection' of 700 NGOs for running microcredit operations from among 1,212 interested NGO-MFIs.
NGOs registered under any of the relevant laws, namely, The Societies Registration Act, The Trust Act 1882, The Voluntary Social Welfare Agencies (Registration and Control) Ordinance 1961 and The Company Act 1994 were eligible for applying.
Mr Hossoin said among the 700 NGOs only 435 applied during second-phase scrutiny stating that they had fulfilled preconditions for the licence.
"They were supposed to set up office, appoint a certain number of staffs, and deposit Tk 1.0 million into bank account as deposits for the licences." However, the MRA found only 179 NGO-MFIs capable of operating micro-lending and borrowing to date after thorough inspections. Another 120 NGO-MFIs appealed to get three-year intermediary licence as MRA rejected their application among those 435.Â Seventeen NGO-MFIs are still awaiting final decision. Â
"We will review their situation time to time, and if they fulfil preconditions, they would be awarded licence," Mr Hossoin said. Â
The MRA was established to ensure transparency and accountability of microfinance institutions (MFIs) in the country, against the backdrop of series of scams that let down many clients.
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