Microfinance has played an instrumental role in enhancing financial inclusion, employment opportunities, and poverty alleviation in Bangladesh. The significant presence of CMSMEs in Bangladesh prompted a rapid rise of microfinance institutions (MFIs) across the country, with 739 MFIs and 23543 branches currently operating under the licence of the Microcredit Regulatory Authority (MRA). During the fiscal year 2021–22, loan disbursements of microfinance reached staggering figures of BDT 226,007 crore, while customer savings stood at BDT 85,036 crore.
The continuous innovation and expansion of microfinance services have facilitated the availability of microcredit and microenterprise loans to the unserved and underserved marginalised community of Bangladesh. The MFIs have flourished in that regard, with annual turnover figures reaching BDT 1.60 trillion while maintaining a near-perfect 98% loan recovery rate, of which 91% of the borrowers are women.
The microfinance sector is met with a fair share of challenges, with high-interest rates and economic shocks largely affecting the financial sustainability of MFIs. Nevertheless, the massive contribution of MFIs towards women’s empowerment, financial inclusion, and poverty reduction has elevated the socio-economic status of Bangladesh and reinforced the belief in the future success of microfinance.
Md. Shah Jalal
Editor
IDLC Monthly Business Review
More Print Editions Subscribe