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I am glad to learn that "MRRU" is going to publish a report on the activities of NGO-MFIs. This publication is based on the self-reporting systems of the Microfinance Institutions (MFIs) themselves and it provides valuable information on the sector. I believe that this report prepared by MRRU would provide useful insights for policy makers and other stakeholders. MRRU is in continuous touch with MFIs directly and also with other related authorities for further improvement of the quality of data and information. I hope that next publications of MRRU would be more analytical and informative if the Unit gets proper feedback and suggestions from the stakeholders. I thank the members of the team of MRRU for their effort in publishing this report. I also thank the related departments of Bangladesh Bank for their cooperation in software development, computer assistance and printing. I believe that all concerned agencies and institutions will welcome this effort of MRRU and extend cooperation for sustainable development of the microfinance sector in Bangladesh.

Dr. Salehuddin Ahmed
Bangladesh Bank

The government of Bangladesh has established "Microfinance Research and Reference Unit (MRRU)" in Bangladesh Bank to help formulate uniform policy guidelines for microfinance sector in the country. A National Steering Committee was also formed to oversee the unit and to formulate a regulatory framework for this sector. The Unit has published an operational guideline for monitoring management and financial system of microfinance institutions. It contains reporting formats, financial guideline, guideline for measuring performance and terms of references for internal and external audit. Based on this reporting format, MRRU requested NGO-MFls to submit quarterly information from January 2004 to the Unit. Recommending a legal framework for the microfinance institutions is one of the main terms of references of the Steering Committee. In this connection, the Committee has prepared and submitted a draft law to the government for consideration. It is expected that after the promulgation of the law microfinance sector in Bangladesh will be under a formal regulatory framework in near future.

This is the first consolidated and analytical publication of MRRU on the basis of information provided by NGO-MFls according to the prescribed format. Information given in this report could not be verified at field level by the MRRU due to lack of resources. However, the key findings of this report have similarities with previous findings published in different literature by different authorities. The Unit expects that it would be able to verify some sample data at field level in near future, which will help the Unit to provide more reliable and quality information in future.

Till May 31,2005 MRRU received information from more than 600 NGO-MFls for different quarters started from January-March 2004; however, it could not analyze all of them due to time and resource constraints. This report contains year-end information of 352 MFls, which includes all the big players of this market. Providing information on the size of the industry, types of players, their coverage and outreach, and their performance are the main objectives of this publication. From this publication individual MFls would get information on their position in the overall market and also get information on their relative performance. This report would help MFls to improve their performance, to understand their abilities and limitations. It would also provide valuable insights to the policy makers to formulate policy for this sector. For example, what would be the minimum size of the credit to invest in an income-generating project, what would be upper limit of credit and savings collected by an individual MFI, what would be the appropriate ratio of members to borrowers etc., all these questions could be usefully addressed on the basis of the information provided in this report. However, this report could not provide valuable analysis on the financial performance of this sector due to lack of necessary data and information. The Unit expects that it would be able to overcome this shortcoming in its next publication.

Khandakar Mazharul Haque Executive Director
Bangladesh Bank


Published by Microfinance Research and Reference Unit (MRRU)
1st Annex Building, 1st Floor, Bangladesh Bank
Head Office, Dhaka
Phone: 880-2-7125740
Fax: 880-2-9564117, E-mail: