Micro-credit Regulatory Authority has cancelled licences of 31 non-government organisations (NGOs) on charge of misuse of funds during a period from early 2012 to July 30 this year.
The rate of licence cancellation of NGOs or micro finance institutions (MFIs) has increased after formulating the Micro-credit Regulatory Authority Rules, 2010 in January 2011, said a senior executive of the authority.
“The activities of NGOs and MFIs have come under the regulator scanner thanks to the new rules,” said MRA Director Md Shazzad Hossain.
MRA scrapped the licences due to breaching rules most of them misused funds, he said. The NGOs are not capable to run their operations.
Currently, 690 NGOs are operating in the country, serving around 40m of the country's 160m people.
The authority, however, considered issuing fresh licences of more foreign-funded NGOs and MFIs, said the executive.
Out of 1,212 applications, he said, MRA primarily selected 705 for awarding licences and asked 101 applicants to apply again with proper and necessary documents.
The regulator awarded 71 licences in 2010, 59 in 2011, 73 in 2012 and 48 as of Thursday for beginning operations.
Since its inception in 2006, MRA has been continuously making efforts for creating an enabling environment for the micro-finance industry for its sustainable development.
Bangladesh has become the first country in the world to establish a separate entity, MRA, under a separate act to licence, monitor and oversee MFIs, as microfinance had been a private sector initiative all along and flourished without any formal regulatory entity in most parts of the world.
Though Bangladesh has been the pioneer of micro-credit, it lagged behind some countries in enacting a regulatory framework for this sector. Over the years, it has brought a number of changes in its rules and regulations.
According to MRA statistics, the sector has created direct job opportunities for over 110,000 people 82% of them are male and 18% female.
The country’s first micro-finance institution Bangladesh Rural Advancement Committee (BRAC) was established in 1972 through which micro-finance activities had started in Bangladesh.
