Some 1130 non-governmental organizations (NGOs) have applied for licence to run microcredit operations across Bangladesh, and all may get the go conditionally.
Sources say the government has decided to award conditional licences for three years to all of the new Micro Finance Institution (MFI) applicants subject to compliance with their application requirements.
"We already awarded four licences last week and the process would continue until the scrutinizing of all the applications," said Md. Zillur Rahman, Director of the Microcredit Regulatory Authority(MRA).
If all the applications are eligible to get licence, he added, the MRA has decided to award licence to all.
The Microcredit Regulatory Authority starts licensing after eight years to expand small-loan operations in new areas across the country.
In February last, the regulator invited applications following rising interest among new NGOs which had sought licence for lending to the poor under government recipe for turning them self-reliant through undertaking small vocations.
The NGOs that are registered under any of these laws - the Societies Registration Act, the Trust Act 1882, the Voluntary Social Welfare Agencies (Registration and Control) Ordinance 1961, and the Company Act 1994 - can apply for the licence.
Each of the interested NGOs is required to show Tk 3.0 million in its bank account as deposit for starting operations. The amount will be used for providing small loans subject to permission of the MRA, according to its circular.
The selected organisations will be required to have minimum 300 small clients and outstanding loan amounting to Tk 4.0 million each in the first year, which will be minimum 600 clients and Tk 7.0 million loan in the second year, and minimum 1,000 clients and Tk 10 million loan in the third year for getting final licence.
The NGOs that are now engaged in various development activities, except microcredit, will qualify for obtaining licence.
MRA Director Zillur Rahman said evaluation of all applications might require around three years.
"We lack manpower, it will take lot of time to evaluate all applications... it may take three years," he told the FE.
In July 2006, the then government enacted the Microcredit Regulatory Authority Act 2006 to bring the NGOs-MFIs under a regulatory framework, which became effective from August 27, 2006.
The MRA then invited applications for the first time for microcredit operations, especially for legalising those which had already been in operation.
"We received 4,300 applications in 2006-07, but found only 758 NGOs competent for microcredit operations," Mohammad Yakub Hossain, another MRA Director, told the FE earlier.
In the second phase, the MRA invited applications from 37 poverty-stricken districts and received 1,212 bids.
The regulator marked out the areas then to avoid overlapping of small lending/borrowing services and also to help meet goals of government's poverty-alleviation programmes.
The MRA finally awarded 122 licences in 2014 after three years of observation.
However, the regulator cancelled licences of 133 NGOs-MFIs in different phases for compliance-related deficiency in their operations. Currently, around 750 NGOs-MFIs are running operations under the regulator.
The registered MFIs are serving around 40 million of the country's estimated160 million people.
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