DFID\\\'s MRA project extended by one more year

Ismail Hossain | June 28, 2014 00:00:00

The Department for International Development (DFID) of the United Kingdom has extended a project aimed at strengthening the Microcredit Regulatory Authority (MRA) by one more year.

Under this programme, the DFID provided Tk 370 million to support the MRA in 2007. The project was supposed to end in June this year.

Earlier, the microcredit regulator had sought one-year extension of the DFID-funded project named 'Promoting Financial Services through Poverty Reduction' (PROSPER).

"The DFID has confirmed the extension but there would not be any new fund to be added to the original cost of the project," Khandakar Muzharul Haque, Executive Vice Chairman of the MRA told The FE.

The DFID support was instrumental in providing the MRA with core operational funding in its early years before government resources became available. It also provided technical expertise about regulation, economic analysis and IT. Besides, the fund was used for getting a permanent office space with co-funding from the government.

According to the MRA sources, the newly-established regulator did not have enough operational fund from the government in 2007. The DFID fund helped it grow and to be independent.

Currently, the MRA has 34 officials under this project, most of them being experts.

However, the government has not approved yet a full-pledged organogram for the MRA, though seven years have passed since its establishment.

Khandakar Muzharul Haque said, "If the project was not extended, it would have been impossible for us to continue without the project staff."

"We hope the government would provide full support and staff within this year," he added.

If the new organogram is passed, the MRA would have enough expertise for full-pledged operation across the country.

The MRA was established to ensure transparency and accountability of micro-finance institutions (MFIs) in the country. It is the central body to monitor and supervise operation of the MFIs.

Currently, 745 MFIs are registered with the MRA. These registered NGOs are serving more than 40 million out of the country's 160 million people.

With a view to bringing the MFIs under a regulatory framework, the then government in July 2006 enacted the Microcredit Regulatory Authority Act, 2006 (Act No. 32 of 2006), which became effective from August 27, 2006.

The MRA is now in a process of granting licenses to more 350-400 MFIs.