Current issue surrounding micro finance in Bangladesh:
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- As the market of micro-finance becomes more mature, competition becomes more intensified among major MFIs such as BRAC, Grameen Bank, ASA and others.
- According to one ASA senior staff, about 500 MFIs are engaged in micro-finance in Bangladesh.
- Against a backdrop of overheated competition, ‘’overlapping borrowing issues’’ among MFIs and borrowers has also become apparent.
- As the number of heavily indebted borrower increases, the number of non-performing loans has been growing rapidly.
- The percentage of overlapping borrowers were 20% in Rajshahi and 33% in Comilla, which indicates that ‘’overlapping borrowing issues’’ are quite serious in Bangladesh.
- There was a trend that overlapping borrowers using more than three MFIs or entities were likely to fall behind their payment. (Or become overdue borrowers)
- Also, there was a tendency that overlapping borrowers who did not invest their money into IGAs(Income Generating activities) were likely to fall behind their payment.
My suggestions to ASA
- To improve the skill of credit analysis among loan officers.
- To make its loan system more flexible to fully satisfy the demand of the clients.
- To take an initiative to start a information sharing activities with other major MFIs such as BRAC and Grameen Bank.
[h3]Yasuhiko, [br] Blakeley Fellow 2010 [/h3]