Regulation of Microfinance Institutions – Dialogue for better understanding
The Institute of Microfinance ((InM) and the Microcredit Regulatory Authority (MRA) jointly organized a workshop titled `Regulation of Microfinance Institutions: Dialogue for Better Understanding,’ at CIRDAP auditorium on 16 February 2009. The workshop was moderated by the Executive Director of the InM, Professor M. A. Baqui Khalily.
The keynote paper of the workshop was presented by the executive Vice-President of the Microcredit Regulatory Authority (MRA), Mr. Khandkar M Mazharul Haque, with Professor Sayed Moinul Ahsan, a visiting scholar to InM, Mr. M Fazlul Kader, General Manager of PKSF, and Ms. Lila Rashid of MRA, attending as designate discussants. Among others the dialogue was participated by academics, researchers, representatives of InM, PKSF, MFIs, DFID, MRA, and other development agencies.
In his opening remarks the moderator, Professor Khalily mentioned that the objective of the dialogue-cum-workshop was to remove suspicions of the MFIs about the MRA’s regulation — actually what type of regulation it was going to enforce, and would or not the regulation turn to be a controlling mechanism over the MFIs, etc.
Mr Mazharul Haque in his deliberation vividly elaborated the background of bringing in the MRA and how amicably and effectively it would `regulate’ the MFIs towards ensuring their better transparency and accountability for the peoples’ interest.
The representatives of MFIs said that they stepped into the sector spontaneously, grew freely so far, and contributed to the sector in poverty alleviation with `self-regulation,’ which they termed `effective’ for flourishing of the sector. They expressed their concerns if any `regulation’ was imposed, that might call upon the innovation and spontaneity of the MFIs, which is a great strength for the development of the sector.
The representatives of the MFIs told about some anomalies at the field being happened because of gaps between the instruction of the MRA and its handling by the local administrations. The issues they repeatedly raised included registration, ceiling of loans outstanding, and track record of microfinance operations. Appreciating the InM for arranging this workshop, they said that this sort of dialogue was necessary among the stakeholders for better understanding.
The MRA representatives assured that no `unnecessary control’ would be imposed upon the MFIs and this sort of dialogue would continue to make the guideline of the `regulation’ more accommodative to MFIs, side by side protecting the interest of the poor.
In the concluding remark Professor Khalily appreciated all for attending the workshop and expressed his expectation that InM would get cooperation in its future similar events at the regional levels.