Non-governmental organisations that carry out microcredit operations in Bangladesh, including lending to members and collecting member savings, generally need a licence from the Microcredit Regulatory Authority. Conducting microcredit without a licence is prohibited and can lead to penalties and closure. Banks, finance companies and certain statutory bodies are regulated separately and do not need an MRA licence for their lending. Whether a particular programme falls within the regime depends on its activities and structure, so we review the facts, including any partner-led lending and savings collection, before advising whether an organisation must apply as a licensed microfinance institution.

The MRA considers the organisation's legal registration, governing documents, governance structure, financial position, size and quality of the existing microcredit programme, sources of funds, internal controls, accounts and audit reports, and the experience and integrity of its management and board. Applicants must show that member savings will be protected and that the programme is sustainable. Eligibility thresholds and documentation requirements are set by the rules and MRA circulars and change from time to time. We prepare applications that present a consistent, well-documented picture and anticipate the questions the Authority is likely to raise.

Licensed providers can generally collect savings from their members under the conditions set by the MRA rules, including limits, record keeping and use of funds, but they cannot take deposits from the general public like a bank. Taking deposits outside the permitted framework can breach banking and microcredit laws and lead to serious consequences. Member savings must be properly accounted for and protected. We review savings products and policies to make sure each microfinance institution stays within the permitted scope and manages member funds with appropriate safeguards. Written savings policies should cover withdrawals, interest and record keeping.

Yes, but approvals are needed. Foreign grants to NGOs require registration with the NGO Affairs Bureau and project approval under the Foreign Donations (Voluntary Activities) Regulation Act 2016 before funds are received and used. Foreign loans raise additional issues, including Bangladesh Bank requirements for foreign borrowing, MRA conditions on sources of funds, and the organisation's own constitutional powers. Impact investors and development partners also expect strong governance and reporting. We advise on the correct approval route and draft funding agreements that reflect Bangladeshi requirements and the funder's priorities. Funding timetables should allow for each approval before money moves.

The MRA expects a clear separation between the general body, the governing board or executive committee and management, with defined powers, regular meetings, proper minutes, conflict of interest controls and independent audit. Family control and concentration of power in founders can raise concerns, especially in related party dealings. Policies on lending, savings, human resources, procurement and internal audit should be approved and followed. We review existing structures against current MRA expectations and good practice, and recommend changes that are practical for the organisation's size and history. We usually phase changes, with board resolutions and updated policies, so operations continue.

Yes. Where a licensed provider breaches the law, licence conditions or MRA directions, or where its management threatens members' interests, the Authority has powers that can include directions, penalties, suspension or cancellation of the licence and the appointment of an administrator in serious cases. These measures seriously affect members, staff and lenders. Early, cooperative engagement and a credible remedial plan often lead to better outcomes. We advise boards facing regulatory action and, where appropriate, challenge decisions through review or proceedings in the High Court Division. Boards should gather compliance evidence and minute decisions before responding to any notice.

Partnerships with mobile financial services providers for loan disbursement, repayment collection and savings are increasingly common and can reduce cash handling risk. They must comply with MRA rules on products and operations, Bangladesh Bank rules governing the mobile financial services provider, and data protection requirements under the Personal Data Protection Act 2026. Contracts should address responsibilities, fees, data sharing, reconciliation, fraud and member complaints. We review and negotiate these partnership agreements and advise on the regulatory approvals or notifications that may be needed before launch. A small pilot before full launch helps test reconciliation and complaint handling.

Most disputes are resolved through the institution's own complaint procedures and negotiation, and the MRA expects fair treatment and collection practices. Where court recovery is needed, the route depends on the amount and documents, and mediation may be required before certain suits in districts where the Legal Aid Services (Amendment) Act 2026 scheme operates. Aggressive collection can create legal and reputational risk. We advise each microfinance institution on lawful recovery policies, documentation that supports enforcement, and handling disputes that reach the courts or the regulator. Signed loan documents and repayment histories are essential evidence for any recovery step.