Microfinance Sector

Development of

Microfinance Sector

Development of microfinance sector

Bangladesh is known as the landof microcredit in the world. The data on microfinance industry of the country have been drawing increased attention of researchers, academicians, development practitioners, donors and policy makers at home and abroad. This analytical part of Microfinance Statistics 2015 portrays the picture of the changes in different aspects of Microfinance Institutions (MFIs) in different categories. In 2015, a total of 506 MFIs including the Grameen Bank (GB) have provided microfinance related information as opposed to 511 MFIs in 2014.

Institutionally, microcredit is provided through direct providers as well as apex lenders. Microfinance institutions (MFIs) are the main direct providers, which are basically non-government organizations (NGOs). This review has labeled them here as MF-NGOs. BRAC and ASA are though MF-NGO, they have been shown out of the MF-NGOs category as they are large compared to the other ones.Grameen Bank (GB) has also been shown as large actor in the microfinance industry.Besides these, the report includes other retailers and wholesalers like Palli Karma-Shahayak Foundation (PKSF) and Private Commercial Banks (PCBs), Specialized Banks (SBs),.State-Owned Commercial Banks (SCBs), Rural Development Scheme (RDS) of Islami Bank Bangladesh Ltd. (IBBL) and various government sponsored programs like BRDB-TCCAs and Jubo Unnayan Adhidaptar, etc., which are involved in wholesale and retail lending. Both public and private sectors were the two paramount sectors for the wholesale lending in the reporting year 2015. A comprehensive section appears at the end of this chapter showing the status of microcredit under wholesale & retail lending program during 2015.

1.1.Outreach of MFIs:

This review has used the number of branches, loan coverage, net savings and loans outstanding, etc. that reveal the institutional and the financial strength of the MFIs to assess the extent of their outreach in 2015 vis-à-vis 2014.

1.1.1.Number of branches: The total number of branches of the reporting MFIs is18,635 as compared to17,795as on December 2014 registering an increase of 6% (Table 1.1.1). The MF-NGOs together has the highest number of branches of 11,052 with around 59% share of the total sector, followed by the single largest MFI namely ASA with a share of 16%, GB by 14% and BRAC by 11%in 2015. The number of branch per MF-NGO both in 2015 and 2014 as shown in the table as 37 and 35 respectively might give a misleading impression as statistically this average is not a representative figure. Among the 506MF-NGOs, there are MFIs with only one branch while ASA has 2,932 branches, BRAC has 2,083 branches, BURO Bangladesh has 790 branches and TMSS has 578 branches.

Table 1.1.1: Distribution of branches

(As of December)

Organizations / Number of branches / Number of branches per MFI / Change over 2014 (in %)
2015 / 2014 / 2015 / 2014
Number / % of total / Number / % of total
GB / 2,568 / 13.78 / 2,568 / 14.43 / 2568 / 2,568 / 0.00
BRAC / 2,083 / 11.18 / 2,039 / 11.46 / 2083 / 2,039 / 2.16
ASA / 2,932 / 15.73 / 2,931 / 16.47 / 2932 / 2,931 / 0.03
Rest MF-NGOs / 11,052 / 59.31 / 10,257 / 57.64 / 22 / 20 / 8.82
Total / 18,635 / 100.00 / 17,795 / 100.00 / 37 / 35 / 5.76

Source: CDF survey 2014 & 2015.

1.1.2.Number of active members: As on December 2015, the total number of active members of microfinance sector is 36.23 million that includes active members of GB, BRAC, ASA and also the rest MF-NGOs. (Table 1.1.2). The table shows that the MF-NGOs have 15.15 million members in 2015 with the highest share of nearly 42% of the sector, as against nearly43% in 2014. Grameen Bank has more than 8.81 million members constituting over 24% in 2015. ASA has more than 6.90 million members in 2015 as opposed to 5.32 million in 2014 resulting in significant increase.BRAC’s number of members is 5.38 million in 2015 as against 5.51 million in 2014 resulting in slight decrease.The average number of member per branch is 1,944in2015 as compared to 1,913 in 2014 registering an increase of2% over 2014.

Table 1.1.2: Distribution of active members

(As of December)

Organizations / Number of active members / No. of active members per branch / Change over 2014 (in %)
2015 / 2014 / 2015 / 2014
Number / % of total / Number / % of total
GB / 8,806,779 / 24.31 / 8,640,225 / 25.38 / 3,429 / 3,365 / 1.93
BRAC / 5,377,951 / 14.84 / 5,510,905 / 16.19 / 2,582 / 2,703 / (4.47)
ASA / 6,902,024 / 19.05 / 5,322,351 / 15.64 / 2,354 / 1,816 / 29.64
Rest MF-NGOs / 15,145,525 / 41.80 / 14,565,450 / 42.79 / 1,370 / 1,420 / (3.50)
Total / 36,232,279 / 100.00 / 34,038,931 / 100.00 / 1,944 / 1,913 / 1.65

Source: CDF survey 2014 & 2015.

1.1.3.Distribution of active members by location and gender: In terms of rural and urban considerations, it is seen that 90%members belong to rural areas versus 10% in the urban areaswith overwhelming preponderance in rural areas. Among the 4 broad categories GB has 100% rural coverage in terms of members followed by BRAC (99%), ASA (89 %) and the rest MF-NGOs have (81%).In the urban areas MF-NGOs occupy 19% of the client coverage.

If looked at from gender point of view it is seen that in the rural areas, the female members occupy 84% membership as against 6% male membership. In the urban areas, there is 9%female membership as against 1% male membership. From aggregate gender point of view, the female membership constitutes93% while the male membership is 7%. The picture reveals that the MFIs have not shunned away from women empowerment.

In terms of 4 categories of MFIs, GB has the highest percentage of women membership of 97% in the rural areas followed by BRAC (96%), ASA (81%) andMF-NGOs (73%).

Table 1.1.3: Distribution of active members by location and gender

(As of December 2015)

Organizations / Rural / Urban / Total
Female / Male / Total / Female / Male / Total / Female / Male / Total
GB / 8,499,007 / 307,772 / 8,806,779 / 0 / 0 / 0 / 8,499,007 / 307,772 / 8,806,779
(96.51%) / (3.49%) / (100.00%) / - / - / - / (96.51%) / (3.49%) / (100.00%)
BRAC / 5,170,335 / 136,415 / 5,306,750 / 71,201 / 0 / 71,201 / 5,241,536 / 136,415 / 5,377,951
(96.14%) / (2.54%) / (98.68%) / (1.32%) / - / (1.32%) / (97.46%) / (2.54%) / (100.00%)
ASA / 5,605,773 / 542,894 / 6,148,667 / 709,595 / 43,762 / 753,357 / 6,315,368 / 586,656 / 6,902,024
(81.22%) / (7.87%) / (89.08%) / (10.28%) / (0.63%) / (10.92%) / (91.50%) / (8.50%) / (100.00%)
Rest MF-NGOs / 11,064,875 / 1,242,394 / 12,307,269 / 2,500,762 / 337,494 / 2,838,256 / 13,565,637 / 1,579,888 / 15,145,525
(73.06%) / (8.20%) / (81.26%) / (16.51%) / (2.23%) / (18.74%) / (89.57%) / (10.43%) / (100.00%)
Total / 30,339,990 / 2,229,475 / 32,569,465 / 3,281,558 / 381,256 / 3,662,814 / 33,621,548 / 2,610,731 / 36,232,279
(83.74%) / (6.15%) / (89.89%) / (9.06%) / (1.05%) / (10.11%) / (92.79%) / (7.21%) / (100.00%)

Source: CDF survey 2014 & 2015.

1.1.4.Number of borrowers received loans during 2015: As on December 2015, the total number of active members of microfinance sector is 36.23 million (Table 1.1.3). Of the total active members of 36.23 million, 30.28 million members have received loans during the year 2015 showing 84% of the total members who have received loans till the year end. There are many who had remained in the transition period of availing of new loans. In 2015, of the total loans availing borrowers, the MF-NGOs occupy 37% followed by GB (27%), ASA (21%) and BRAC (15 %).

In 2015, the number of borrowers received loan per branch resulted in the increase of 8% compared to the situation of 2014. In 2015, ASA’s per branch borrowers increased to 27% followed by BRAC (13%), GB (9%) and MF-NGOs (1%).

Table 1.1.4: Distribution of borrowers received loan during 2015

Organizations / Number of borrowers received loan during / Number of borrowers per branch / Borrowers as % of active members / Change over 2014
(in %)
2015 / 2014 / 2015 / 2014 / 2015 / 2014
Number / % of total / Number / % of total
GB / 8,180,408 / 27.02 / 7,482,122 / 28.03 / 3,186 / 2,914 / 92.89 / 86.60 / 9.33
BRAC / 4,596,073 / 15.18 / 3,989,004 / 14.94 / 2,206 / 1,956 / 85.46 / 72.38 / 12.78
ASA / 6,404,698 / 21.15 / 5,045,198 / 18.90 / 2,184 / 1,721 / 92.79 / 94.79 / 26.90
Rest MF-NGOs / 11,095,397 / 36.65 / 10,180,947 / 38.13 / 1,004 / 993 / 73.26 / 69.90 / 1.14
Total / 30,276,576 / 100.00 / 26,697,271 / 100.00 / 1,625 / 1,500 / 83.56 / 78.43 / 8.30

Source: CDF survey 2014 & 2015.

1.1.5.Annual disbursement of micro-credit: The total amount loan disbursed in 2015 is Tk. 827,768.40million as against Tk. 647,215.61million in 2014 resulting in the increase of Tk.180,552.79 million (28%). The review shows thaton the whole this sector has achieved a considerable increase in loan disbursement to the individual borrowers in 2015. Of the total loan amount disbursed, the MF-NGOs disbursed 37% followed by BRAC (23%), ASA (21%) and GB (18%). Disbursement pattern in terms of percentage of the MFIs is almost similar to some extent in 2015 and 2014. In aggregate, the disbursement per branch is 44.42 million in 2015 as compared to 36.37 million in 2014. The disbursement per branch in 2015 has substantially increased in BRAC followed by ASA, GB and MF-NGOs. In 2014, BRAC was the highest followed by GB, ASA and MF-NGOs. On the other hand, loan per borrower in 2015 is the highest in BRAC followed by ASA, GB and MF-NGOs.BRAC as a single institution remains at the top with the annual loan disbursement of Tk. 192,982.79 million in 2015 as against Tk. 151,904.86 million in 2014, occupying about 27% increase.

Table 1.1.5: Distribution of disbursement of micro-credit

Organizations / Disbursement of micro-credit during
(Tk. in million) / Disbursement of micro-credit per branch / Micro-credit received per borrower / Change over 2014 (in %)
2015 / 2014 / 2015
(Tk. in million) / 2014
(Tk. in million) / 2015
(in Tk.) / 2014
(in Tk.) / Per branch / Per loanee
Amount / % of total / Amount / % of total
GB / 149,227.30 / 18.03 / 133,320.70 / 20.60 / 58.11 / 51.92 / 18,242 / 17,819 / 11.93 / 2.38
BRAC / 192,982.79 / 23.31 / 151,904.86 / 23.47 / 92.65 / 74.50 / 41,989 / 38,081 / 24.36 / 10.26
ASA / 176,831.73 / 21.36 / 116,056.32 / 17.93 / 60.31 / 39.60 / 27,610 / 23,003 / 52.32 / 20.02
Rest MF-NGOs / 308,726.58 / 37.30 / 245,933.73 / 38.00 / 27.93 / 23.98 / 27,825 / 24,156 / 16.50 / 15.19
Total / 827,768.40 / 100.00 / 647,215.61 / 100.00 / 44.42 / 36.37 / 27,340 / 24,243 / 22.13 / 12.78

Source: CDF survey 2014 & 2015.

1.1.6.Annual Recovery of Micro-credit: The overall loan recovery rate of the sector is 99% in 2015, which is slightly higher than that of 2014(98%). The recovery rate of MF-NGOs in 2015 is 98%, which is equal to ASA (98%) and BRAC (98%). In this year, GB has the highest rate of recover of 100%.Loan recovery pattern in 2015 and 2014 are nearly the same. The gross picture of loan recovered against disbursement is generally high. More than 100% disbursement-recovery ratio figures mean that the previous loans were repaid during the year. The overall disbursement–recovery ratio in 2015 is 96% as compared to 101% in 2014 showing a slight fall during the year. In respect of this ratio, BRAC performed highest followed by the MF-NGOs, GB and ASA. The picture is slightly different in 2014, where GB lagged behind ASA. The MF-NGOs’ recovery situation has fallen a bit by 0.04% as against 2014.

Table 1.1.6: Distribution of recovery of micro-credit

Organizations / Micro-credit recovered during
(Tk. in million) / Rate of recovery (in %) / Recovery as % of disbursement / Recovery change over 2014 (in %)
2015 / 2014 / 2015 / 2014 / 2015 / 2014
Amount / % of total / Amount / % of total
GB / 140,300.40 / 17.61 / 130,210.20 / 20.00 / 99.88 / 99.78 / 94.02 / 97.67 / 0.10
BRAC / 196,999.93 / 24.72 / 153,603.93 / 23.59 / 98.72 / 98.22 / 102.08 / 101.12 / 0.51
ASA / 164,002.72 / 20.58 / 119,759.17 / 18.39 / 98.73 / 98.41 / 92.75 / 103.19 / 0.33
Rest MF-NGOs / 295,476.16 / 37.08 / 247,634.36 / 38.03 / 97.73 / 97.77 / 95.71 / 100.69 / (0.04)
Total / 796,779.21 / 100.00 / 651,207.66 / 100.00 / 98.56 / 98.39 / 96.26 / 100.62 / 0.17

Source: CDF survey 2014 & 2015.

1.1.7.Number of outstanding borrowers: In the year 2015,this review has found an overall upward trend in borrowers’ outreach in GB, BRAC, ASA and MF-NGOs. The total number of borrowers in microfinance sector as on December 2015 has been found to be 29.59million, which was 27.24 million in 2014 (Table 1.1.7) registering an overall annual increase of 9% over 2014. The total share of borrowers ofMF-NGOs has been found to be the highest (39%) in 2015 serving over 11.50 million borrowers, while the Grameen Bank share is 23% followed by ASA (20%) and BRAC (18%). The borrower outstanding positions with regard to the 4 categories of MFIs are almost similar both in 2015 and 2014.

Grossly looked at the number of borrowers per branch, it has gone up to 1,588 in 2015 from 1,531 in 2014. The size of the borrowers with respect to the 4 categories of MFIs has remarkably risen. The number of borrowers per branch is the highest in GB (2,670) followed by BRAC (2,544), ASA (2,012) and MF-NGOs (1,044). Compared to the year 2014, the borrowers per branch increased in GB, BRAC and ASA except rest MF-NGOs.Regarding borrower member ratio in 2015, BRAC is the highest (99%) followed by ASA (86%), GB (78%) and rest MF-NGOs (76%). In 2014 ASA was the highest (88%) followed by BRAC (87%), GB (78%) and MF-NGOs (76%).

Table 1.1.7: Distribution of outstanding borrowers

(As of December)

Organizations / Number of borrowers / Number of borrowers per branch / Borrowers as % of members / Borrowers change over 2014 (in %)
2015 / 2014 / 2015 / 2014 / 2015 / 2014
Number / % of total / Number / % of total
GB / 6,856,448 / 23.17 / 6,747,139 / 24.77 / 2,670 / 2,627 / 77.85 / 78.09 / 1.62
BRAC / 5,298,651 / 17.90 / 4,798,118 / 17.61 / 2,544 / 2,353 / 98.53 / 87.07 / 8.10
ASA / 5,898,466 / 19.93 / 4,664,443 / 17.12 / 2,012 / 1,591 / 85.46 / 87.64 / 26.41
Rest MF-NGOs / 11,540,500 / 39.00 / 11,032,197 / 40.50 / 1,044 / 1,076 / 76.20 / 75.74 / (2.92)
Total / 29,594,065 / 100.00 / 27,241,897 / 100.00 / 1,588 / 1,531 / 81.68 / 80.03 / 3.74

Source: CDF survey 2014 & 2015.

1.1.8.Outstanding loan of micro-credit: The total loan outstanding of MF-NGOs, GB, BRAC and ASA in 2015 has been found at Tk.521,829.36million compared to Tk.409,965.57million in 2014 (Table 1.1.8) resulting in 27% growth. The outstanding loans with respect to all 4 categories of MFIs have increased in 2015 as against 2014.The loan outstanding of MF-NGOs has the major market share of 39% followed by BRAC (22%), ASA (21%) and GB (18%). An exactly similar pattern in the loan outstanding is also noticed in 2014.

Overall, loan outstanding per branch has increased to Tk. 28.00 million in 2015 from Tk. 23.04 million in 2014 registering growth of 22%. Per branch loan outstanding has increased in all these category of organizations in 2015 compared with 2014.

Again loan outstanding per borrower with respect to these organizations has also gone up by and large. In 2015, noticeable increase in loan outstanding per borrower has occurred in BRAC followed by ASA, MF-NGOs and GB. Average loan outstanding per borrower has reached Tk. 17,633 in 2015 from Tk. 15,049 in 2014 resulting in increase of 17%.

Table 1.1.8: Distribution of outstanding loan

(As of December)

Organizations / Outstanding loan of micro-credit
(Tk. in million) / Outstanding loan per branch (Tk. in million) / Outstanding loan per borrower (in Tk.) / Change over 2014 (in %)
2015 / 2014 / 2015 / 2014 / 2015 / 2014 / Per branch / Per borro-wer
Amount / % of total / Amount / % of total
GB / 96,422.30 / 18.48 / 87,495.30 / 21.34 / 37.55 / 34.07 / 14,063 / 12,968 / 10.20 / 8.45
BRAC / 113,106.44 / 21.67 / 91,244.67 / 22.26 / 54.30 / 44.75 / 21,346 / 19,017 / 21.34 / 12.25
ASA / 109,652.86 / 21.01 / 72,218.62 / 17.62 / 37.40 / 24.64 / 18,590 / 15,483 / 51.78 / 20.07
Rest MF-NGOs / 202,647.76 / 38.83 / 159,006.98 / 38.79 / 18.34 / 15.50 / 17,560 / 14,413 / 18.28 / 21.83
Total / 521,829.36 / 100.00 / 409,965.57 / 100.00 / 28.00 / 23.04 / 17,633 / 15,049 / 21.55 / 17.17

Source: CDF survey 2014 & 2015.

1.1.9.Members’ net savings and savers: Members’ savings is considered as an important indicator of strength of microfinance program. Mobilization of savings from group members is one of the prime activities in microfinance. Members’ savings is a financial asset of the members and is also a good source of finance for the MFIs. Notably it is still the cheapest source of finance among the overall financial mix. Mobilization of savings by the lending agencies is a part of the process of asset creation by the members. Once, the savings was used to be a kind of unwritten collateral against the loans advanced to the clients. But this is no longer in practice. Most MFIs allow savings withdrawal. There is no link between loan and savings now. This review compare the net savings for the years 2015 and 2014 as the information are available from the CDF survey.

The Table 1.1.9 below presents net savings by the members of different microfinance sectors. This review has found that net savings mobilized by the members of MFIs at the end of 2015 is Tk.270,689.68 million, which was Tk.227,130.70million in 2014 with an increase of Tk. 43,558.98 million. The overall growth rate of net savings has been calculated to be 19% in 2015 over 2014.

In 2015of the total net savings, GB has mobilized 44%,ASA:16%,BRAC: 15% and the rest MF-NGOs: 25%. GB is the single largest savings mobilizing MFI in than country in 2015. GB has a good number of savings products. Besides, as a bank it can collect deposits from the general public. The savings mobilization pattern of these organizations in 2015 and 2014 is almost similar in terms of percentage.

The net savings per branch has increased to Tk. 14.53 million in 2015 from Tk. 12.76 million in 2014. Net savings per branch reveals that GBhas Tk.46.26 million followed by and BRAC Tk. 19.31 million, ASA Tk. 15.14 million. The picture shows huge strength of GB in mobilizing savings. With regard to MF-NGOs savings mobilization in respect of branch it is noticed that the net savings has increased to Tk. 6.09 million in 2015from Tk. 5.34 million 2014. This figure cannot be compared with BRAC and ASA as these are two giant MFIs in the country.

Net savings per member/saver has been reckoned both for 2015 and 2014. The industry picture shows that overall net savings per saver has increased to Tk. 7,471 in 2015 from Tk.6,673in 2014. If viewed from the category of the 4 organizations, net savings per saver in 2015 in GB is Tk.13,488followed by BRAC Tk. 7,480, ASA Tk. 6,432, MF-NGOs Tk. 4,442. GB’s members have the highest net savings. The net savings mobilization per saver in 2014 also portrays the similar pattern like that of 2015.

In 2015, overall there has been considerable growth of 14% in net savings per branch. In addition, per branch net savings mobilization in respect of the 4 category of organizations has substantially risen. Further, the growth of net savings per saver has considerably increased in 2015.

There is another most important financial indicator called savings-loan outstanding ratio. This ratio indeed shows the potential of mobilizing savings by the MFIs. As per MRA regulation, an MFI is allowed to mobilize a maximum of 80% ratio.In 2015, overall savings-loan outstanding ratio in the sector is 52% compared to 55% in 2014. Looking at from industry point of view, it is not much meaningful. Besides, the Grameen Bank has been also included here. Grameen Bank is regulated by the Bangladesh Bank (Central Bank), not by the MRA. This ratio has to be seen from a single MFI point of view. In 2015, this ratio of ASA is 40%, BRAC is 36% and MF-NGOs is 33%. This ratio in 2014 is a bit higher with regard to these organizations that show thestrength in mobilizing savings.

Table 1.1.9: Distribution of members’ net savings and savers

(As of December)

Organizations / Members’ net savings
(Tk. in million) / Net savings per branch
(Tk. in million) / Net savings per savers
(in Tk.) / Savings-loan outstanding ratio (%) / Change over 2014(in %)
2015 / 2014 / 2015 / 2014 / 2015 / 2014 / 2015 / 2014 / Per branch / Per saver
Amount / % of total / Amount / % of total
GB / 118,790.00 / 43.88 / 105,790.80 / 46.58 / 46.26 / 41.20 / 13,488 / 12,244 / 123.20 / 120.91 / 12.29 / 10.16
BRAC / 40,228.46 / 14.86 / 34,180.82 / 15.05 / 19.31 / 16.76 / 7,480 / 6,202 / 35.57 / 37.46 / 15.21 / 20.60
ASA / 44,391.83 / 16.40 / 32,402.86 / 14.27 / 15.14 / 11.06 / 6,432 / 6,088 / 40.48 / 44.87 / 36.95 / 5.64
Rest MF-NGOs / 67,279.39 / 24.85 / 54,756.22 / 24.11 / 6.09 / 5.34 / 4,442 / 3,759 / 33.20 / 34.44 / 14.03 / 18.16
Total / 270,689.68 / 100.00 / 227,130.70 / 100.00 / 14.53 / 12.76 / 7,471 / 6,673 / 51.87 / 55.40 / 13.81 / 11.96

Source: CDF survey 2014 & 2015.

1.1.10. Sources of loan funds: This section shows that MF-NGOs availed of a number of sources for fund generation. The distribution of sources of fund as on December 2015 has been presented here and sources of fund of MFIs are categorized into 12 major categories. Among them, the major contributors have been found to be the members’ savings, own fund, PKSF, banks, and surplus income. The other sources were reserve fund, emergency fund, insurance fund, grants by donors, international NGOs, local NGOs and others. Table 1.1.10 presents the fund by sources and Figure 1.1.10 shows the major contributors with percentages for the year 2015.

This review has found from the available data that all the MFIs have mobilized loan funds by using Members’ Net Savings 100% followed by Excess Income 84%,Insurance Fund 79% and Own fund 53%. From all the sources, total loan fund received by the reported 506 MFIs as on December 2015 is Tk. 606,543.24 million.Members’ savings is the highest contributor of Tk. 269,950.82 million 45% among the sources of fund. It is seen that the Own Fund is the second biggest source, which is Tk. 86,506.51 million 14%, Banks’ loan has contributed Tk. 77,890.19 million 13% and is the third biggest source. Excess income is the fourth biggest source of loan fund of MFIs in 2015 contributing Tk. 71,335.64 million 12%. PKSF-an apex lender is the fifth contributor 6% by providing more than Tk. 38,982.16 million in 2015. This survey provides a major but a limited picture as about 200 small MF-NGOs having MRA licensed not reported. So the real scenario of sources of fund did not emerge here, which would have provided a little enhanced scenario, if all licensed MFIs could be taken into account. Anyway, the available data shows the total comprehensive picture of the sector for sure.

Table 1.1.10: Distribution of sources of loan funds

Sources / Fund in 2015 / Number of MFIs received fund / % of MFIs received fund
Amount(Tk. in million) / % of total
Members Savings / 269,950.82 / 44.51 / 506 / 100.00
Own Fund / 86,506.51 / 14.26 / 267 / 52.77
Excess Income / 71,335.64 / 11.76 / 424 / 83.79
Reserve Fund / 19,960.04 / 3.29 / 344 / 67.98
Emergency Fund / 3,993.69 / 0.66 / 128 / 25.30
Insurance Fund / 13,698.15 / 2.26 / 400 / 79.05
Loan from Local Banks / 77,890.19 / 12.84 / 204 / 40.32
Grants from Donor / 3,432.81 / 0.57 / 76 / 15.02
Loan from INGOs / 1,887.91 / 0.31 / 15 / 2.96
Loan from PKSF / 38,982.16 / 6.43 / 159 / 31.42
Loan from Local MFI-NGOs* / 847.42 / 0.14 / 58 / 11.46
Others / 18,057.88 / 2.98 / 256 / 50.59
Total (N=506) / 606,543.24 / 100.00 / 506 / 100.00

Source: CDF survey 2015.

Note: * Local NGOs include ASA, BRAC, BURO Bangladesh and TMSS.

1.1.11. Interest rate on micro-credit: In terms of regulation of the Microcredit Regulatory Authority (MRA), an MFI can charge maximum of 27% interest on loan in declining balance method as done by the banking system. The cost of MFI operations is very high as savings and loan collections have to be done from every nook and corner from the field, so the rate becomes high. In order to bring down the rate, there is no alternative but enabling the MFIs to access to more savings including rural public deposits. There are, however, many MFIs that charge even less than this ceiling. GB is the only specialized microfinance bank in the country, which has been charging 20% in declining balance method for quite a long period of time and did not enhance the rate as yet. It may be noted that GB and some other microcredit providers like RDS (IBBL), Banks and also various government sponsored microcredit related programs are outside the purview of MRA rules with regard to interest rate on microfinance lending.

1.1.12. Interest rate on savings: Microcredit Regulatory Authority (MRA) has also fixed the minimum interest rate on savings. The minimum rate is 6% per annum. MFIs have a number of savings products called compulsory or mandatory weekly savings and long-term savings, etc. Compulsory savings generally have 6% interest rate per annum. The interest rate is higher for long-term deposits. Overall the interest rates vary from 6-10% per annum. Nowadays, the MFIs provide better rates than the banks,