Microcredit Regulatory Authority

regulatory · verified (verified 2026-05-17)

Profile

Head: Prof. Mohammad Helal Uddin
Role: Executive Vice Chairman
Annual budget: —
Staff: —
Established: 2006
Legal basis: Microcredit Regulatory Authority Act, 2006 (Act No. 32 of 2006), effective 27 August 2006

MRA is navigating the most significant structural shift in the microfinance sector since its founding: the Microfinance Bank Ordinance, 2026 (promulgated January 29, 2026) opens a new bank-tier within the sector, with MRA to issue licenses under a new division while Bangladesh Bank handles prudential oversight of any converted banks. Internally, MRA is tightening governance of existing NGO-MFIs through a draft independent-directors regulation (finalised October 2025) and deepening its digital and housing-finance capacity via the IFC-BMSD partnership (signed April 2025). The sector it oversees comprises 724 licensed MFIs (as of June 2024) serving 32.17 million borrowers (91% women), with Tk 1,59,410 crore in outstanding loans and Tk 68,591 crore in member savings. The 24% per annum interest rate ceiling introduced in 2019 remains in force; no formal reduction has been gazetted as of May 2026.

Recent activity

2026-01-29 legal Government promulgated the Microfinance Bank Ordinance, 2026 (gazette notification issued by Ministry of Law, Justice and Parliamentary Affairs). The ordinance authorises MFIs, startups, and venture capital firms to establish microfinance banks with Tk 500 crore authorised capital and Tk 200 crore minimum paid-up capital; at least 60% ownership must be held by borrower-shareholders; profits may not be distributed as personal dividends but must be reinvested in social development; MRA will issue licenses for such banks under a separate division. In January 2026, leaders of major MFIs including BRAC and ASA jointly warned the draft ignored sector realities. ↗↗↗
2026-02-18 reform MicroSave Consulting published analysis of the Microfinance Bank Ordinance 2026, raising governance concerns about the borrower-ownership model and the potential overlap between Bangladesh Bank (regulating new microfinance banks) and MRA (continuing to regulate the original NGO-MFIs); the question of whether MRA or Bangladesh Bank should serve as the primary prudential regulator remains contested among stakeholders. ↗↗
2025-10-19 regulation MRA finalised a draft regulation requiring two independent directors on the boards of approximately 100 medium and large MFIs (loan portfolio exceeding Tk 500 million). Independent directors must be aged 35-70 with at least 10 years of senior government or autonomous-body experience; MRA will approve from a shortlist of four candidates proposed by each institution; monthly honorarium set at Tk 50,000 plus Tk 10,000 per meeting. BRAC Executive Director Asif Saleh publicly warned against politically motivated appointments, citing the banking sector precedent. ↗↗
2025-04-16 international MRA and IFC signed the 'Bangladesh Microfinance Sector Development (BMSD)' project agreement ($350,000 budget, 2.5-year duration) to strengthen MRA's capacity and to develop policies, roadmaps, and guidelines on digital financial services and housing microfinance for MFIs. ↗↗

Provenance & notes

MRA was established under the Microcredit Regulatory Authority Act, 2006 (Act No. 32 of 2006), effective August 27, 2006, and operates under the Financial Institutions Division of the Ministry of Finance. The Governor of Bangladesh Bank serves as ex officio Chairman of the MRA Board; Prof. Mohammad Helal Uddin (University of Dhaka, Department of Economics) joined as Executive Vice Chairman on October 9, 2024. Headquarters is at Agargaon, Dhaka (new building inaugurated May 17, 2025 by Chief Adviser Prof. Muhammad Yunus). Sector size as of June 30, 2024 (most recent complete annual data from MRA): 724 licensed MFIs, 41.55 million members, 32.17 million borrowers (91% women), Tk 1,59,410 crore outstanding loans, Tk 68,591 crore member savings. An earlier Prothom Alo/TBS report cites 683 licensed institutions; the lower figure likely excludes newly licensed or re-licensed entities between reporting dates -- the April 2025 MRA publication (mra.portal.gov.bd) cites 724. The top 10 MFIs are BRAC, ASA, BURO Bangladesh, TMSS, SSS, Sajeda Foundation, Uddipan, Jagorani Chakra Foundation, Paddakhep Manobik Unnayan, and Shakti Foundation; together with Grameen Bank they account for 80-87% of outstanding loans and savings. Grameen Bank is NOT licensed by MRA: it is a statutory public bank established under the Grameen Bank Ordinance 1983, regulated by Bangladesh Bank, and operates outside the MRA framework. BRAC and ASA are the two largest NGO-MFIs under MRA supervision. Interest rate: first capped at 27% in 2010, reduced to 24% (flat/declining balance, effective rate) in 2019; MRA Act mandates biennial review. As of May 2026, the 24% ceiling remains in force with no gazetted reduction. The Microfinance Bank Ordinance 2026 (January 29) creates a new bank tier above the NGO-MFI layer; MRA will license these banks under a new division, but Bangladesh Bank will handle prudential supervision of any resulting banks -- a potentially complex dual-regulatory arrangement that remains contested.

Microcredit Regulatory Authority

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