B Mirror Report: In response to the recent debates and questions raised by various media outlets regarding the Microfinance Bank Ordinance 2025, the Credit and Development Forum (CDF) the national network of microfinance providers has clarified its position.
The organization stated that concerns suggesting the proposed ordinance is not microfinance-friendly or that it is profit-oriented are not consistent with the core philosophy of the ordinance. On the contrary, the law, once passed, will make the microfinance sector more robust and sustainable.
On Friday, January 9, CDF issued a press release stating that the Microfinance Bank Ordinance is a positive and exemplary initiative.
According to CDF, the proposed microfinance bank will be operated as a social business enterprise, as clearly mentioned in the draft ordinance. Clause 9 of the draft specifies that the bank will follow social business principles and investors will not receive any additional returns on their investments, ruling out any profit-driven or private ownership model.
One major question raised in the media is whether converting microfinance institutions into banks could shift focus away from their primary mission. CDF responded that the bank’s objective is not profit, but rather poverty alleviation, employment generation, and support for small enterprises and cottage industries. The bank’s operations will be multidimensional, offering loans alongside insurance services, remittances, domestic and foreign grants, and borrowing opportunities. It will also enable expanded lending in the agricultural sector.
Another point of debate concerns dual control by NGOs and the bank. CDF clarified that the ordinance will not force any NGO to convert into a bank. Organizations may choose to fully or partially bring their operations under the bank. Those parts that are converted will operate under a separate structure managed by Bangladesh Bank, while the NGO portion will remain under the Microcredit Regulatory Authority (MRA). This prevents any issue of dual control within the same framework.
CDF also addressed confusion regarding asset or liability transfer. Only the portion of an NGO that is converted into the bank will transfer its corresponding assets and liabilities not all of the NGO’s resources.
The organization views the ownership structure of the proposed bank positively. 60% of the bank’s shares will be held by poor members, making them the majority shareholders and empowering the primary target group of microfinances. This also ensures that any potential surplus benefits will directly reach the poor members. Drawing on the example of Grameen Bank, where around 90% of shares are held by poor members, CDF emphasized the inclusivity of this structure.
CDF further noted that investors in the proposed bank will only receive the return of their invested capital, with no opportunity for extra profit or dividends. Therefore, private investors seeking personal gain are unlikely to participate, and the remaining 40% of shares will primarily come from surplus funds of various NGOs. Any eventual surplus will ultimately be used for the welfare of poor members.
According to CDF, while microfinance bank laws exist in many Asian and African countries, most are profit-driven. By contrast, Bangladesh’s proposed microfinance bank represents an exceptional and advanced model, where social development is the primary goal. If successful, this initiative could set a new global benchmark, not just for the country’s microfinance sector, but internationally.
