Regulated Microfinance in Bangladesh: Prosper and Challenges

This paper evaluates the opportunities and challenges of regulation of microfinance in Bangladesh. It states that Bangladesh has had three decades of its success without regulation and directs its main focus on the Microcredit Regulatory Act of 2010. The paper bases its analysis on secondary data from various sources, some of which has been analyzed using statistical methods. It covers the following sections in detail:

• Background of microfinance in Bangladesh with a focus on the Grameen Bank;
• Major regulations and changes in the microfinance industry with a brief rephrasing of 23 rules and policy;
• Global experience of countries like Bolivia, Cambodia, Ethiopia, Tanzania, and Uganda before and after the imposition of microfinance regulations were imposed;
• Opportunities and challenges for regulated microfinance covering several aspects: good governance, organizational sustainability, security of stakeholders, confidence buildup, unique and uniform rules, e-regulatory system, overlapping and the issue of competition, incorporation of same rules by MFIs of different sizes, market segmentation, competition with unregulated players, and sources of funds and usage;
• Policy implications and suggestions for the Microcredit Regulatory Authority to enhance the success of regulations.