Misconceptions regarding the Microcredit Bank Ordinance unfounded: CDF

PNN Staff Report

The Credit and Development Forum (CDF), the national network of microfinance organizations, clarified its position regarding recent discussions and questions in the media about the Microcredit Bank Ordinance 2025.

The organization asserts that concerns that the proposed ordinance is not microcredit-friendly or profit-based are unfounded. In a press release, CDF stated that the proposed ordinance is a positive and timely initiative that will make Bangladesh’s microcredit sector more organized, robust, and sustainable in the long term.

According to CDF, the draft clearly mentions that the proposed microcredit bank will operate as a social enterprise. Investors will only be able to recover their invested capital, with no additional dividends, ensuring the initiative is not profit-oriented or privately owned.

Another concern in the media was whether the bank structure might divert from the core goal of microcredit. CDF emphasized that the bank’s primary objectives will be poverty alleviation, job creation, and promoting small and cottage industries. In addition to lending, the bank will offer insurance, remittance, grant management, and credit expansion in agriculture.

Concerns regarding dual control of NGOs and the bank were deemed unnecessary by CDF. NGOs will not be required to convert into banks, though they may partially or fully bring their operations under the bank. The bank-managed section will operate independently under the supervision of Bangladesh Bank, while the remaining NGO operations will stay under the Microcredit Regulatory Authority (MRA).

There has also been confusion regarding the transfer of assets and liabilities. CDF clarified that only the portion of assets and liabilities that are brought under the bank will be transferred; there is no provision to transfer all assets or liabilities of an NGO together.

CDF views the proposed ownership structure positively, with 60% of the bank’s shares owned by poor members. This ensures empowerment of the target groups, and any surplus profits will directly benefit them. They cited Grameen Bank’s ownership model as an example.

Since investors will not receive additional profit or dividends, there will be no incentive for private investors to participate. Any remaining shares will likely be invested from surplus funds of various NGOs, ultimately benefiting the poor population. CDF stated that while many microcredit banks in Asia and Africa are profit-oriented, Bangladesh’s proposed bank is an exceptional, advanced concept that, if successful, could set a new example nationally and internationally.