Microfinance an important part of Bangladesh's development journey: IFC

Microfinance has been an important part of the development journey of Bangladesh, Martin Holtmann, International Finance Corporation's country manager for Bangladesh, Bhutan, and Nepal, has said.

As Bangladesh's economy transitions from least developed country status to the next level, the microfinance industry can continue to play a crucial role, he said at a seminar this week.

The seminar, organised by the Microcredit Regulatory Authority (MRA) and the IFC, aimed at sharing insights from their recent microfinance sector development diagnostic study. 

"This is the right time for all stakeholders to discuss the key reforms and capacity building that need to be implemented to transition and support the country's growing economy," said Martin.

The IFC is here to support modernisation of the sector, enable MRA and MFIs to build their own capabilities, introduce modern governance and solid risk management practices, and leverage technology, he added.

Conducted by FinValue Advisors under the auspices of MRA and IFC, the study delves into two critical components: Digital Transformation and Housing Microfinance (HMF), said a press release.

These components assess the current landscape of digital initiatives and housing microfinance endeavours within the sector, said a press release. 

Moreover, the study illuminates the industry's appetite for change, a crucial aspect in propelling sectoral development and modernisation.

Over 25 Microfinance Institutions (MFI) spanning diverse categories, participated in the diagnostic process alongside key government stakeholders and private sector institutions. 

The collaborative effort focused on pinpointing institutional readiness, evaluating existing regulatory frameworks, gauging market infrastructure viability, assessing consumer readiness, and estimating the requisite financial investments for digital transformation and housing microfinance initiatives.

This seminar marks a significant stride towards fostering collaboration and knowledge exchange within the microfinance landscape, ultimately paving the way for a more inclusive and digitally empowered financial ecosystem, said the release.

The roadmap laid out by the study is a guide for stakeholders to create a strong housing microfinance portfolio, giving members the chance to build secure futures by owning homes, according to the release. 

To make digital transformation and housing microfinance work on a larger scale, a supportive environment across regulations, infrastructure, and institutions is needed. This roadmap brings together the IFC, MRA, MFIs, and others to take meaningful steps that truly benefit microfinance consumers.