113 MFIs' licences cancelled for violating existing rules

FE Report | Published: June 02, 2019 11:27:38 | Updated: June 14, 2019 12:12:08

Photo collected from internet has been used for representational purpose only

A total of 113 microfinance institutions (MFIs) have so far faced regulatory action for breaching the existing rules and regulations, officials said.

The Microcredit Regulatory Authority (MRA) took such punitive actions against them so far.

As of April 21 this year, 704 MFIs were registered with the MRA and 96 got licences from the authority on a temporary basis.

The number of microcredit clients stood at over 29.9 million in June 2017, according to an annual report of the MRA.

"We remind the MFIs to follow the directives of the MRA repeatedly, but they don't pay attention to our directions. Ultimately, the country's central body of the MFIs cancels their licences," a MRA director told the FE.

He said the MRA's main priorities are eradication of poverty, protection of clients' interests and fostering sustainable development of the country by ensuring transparency in microfinance operations and accountability of MFIs.

The MRA scraps licences of MFIs mostly for misusing funds in breach of related rules, he added.

A MRA source said, "Authorities of several MFIs failed to operate their entities properly. Their operational performance was deteriorating day by day. For this reason, they surrendered their licences to the regulator."

Besides, operational costs of a large number of MFIs are much higher than their earnings. As a result, many of them cannot sustain and continue their functioning ultimately, he added.


Share if you like