Govt, MRA, MFIs could make policies more responsive and supportive- says ED of RDRS Bangladesh
Holiday Post Report: The Executive Director of RDRS Bangladesh, has extensive experience of working with international charities, national NGOs, donor-funded government projects, UN agencies, and as development consultant in Bangladesh and other countries in South Asia over a period of 36 years. RDRS Bangladesh was localized from the field programme of Lutheran World Federation (LWF/WS) to become a Bangladeshi NGO in 1997.Dr. Imrul Kayes Muniruzzaman, Executive Director (ED) of RDRS, Banagladesh, had a pioneering role in post-localization journey of the organization to achieve its cherished goal in this long journey.
In an interview with Weekly Holiday Post, Dr. Muniruzzaman said, the microfinance sector in Bangladesh has grown into a globally recognized model for poverty alleviation and financial inclusion. Over the past few decades, it has significantly expanded access to credit for millions of low-income individuals, particularly women in enabling income generation and improved living standards. Microfinance Institutions (MFIs) in Bangladesh have not only transformed rural economies, but also inspired global replication, he added. Dr. Muniruzzaman, ED, RDRS, Bangladesh, holds Ph.D. degree in Geography and Environment from Jahangirnagar University in 2014, focusing on WASH accessibility in the context of climate change and an MBA in Quantitative Business Analysis from the Institute of Business Administration (IBA), University of Dhaka in 1986. He also completed the prestigious Hubert H. Humphrey Fellowship in 2007-2008, at Michigan State University, USA, where he studied Agricultural Economics.
Following is the full text of his interview with Holiday Post taken recently:-
Holiday Post: What are the most pressing challenges that microfinance institutions (MFIs) in Bangladesh currently face in achieving their goals?
Imrul Kayes Muniruzzaman : The sector faces some challenges such as market saturation leading to overlapping services, client over-indebtedness, limited regulatory oversight, and funding constraints for the relatively smaller MFIs. Technological innovation and stronger governance are crucial for sustaining impact. Additionally, political unrest, inflation, climate change, and post-pandemic recovery efforts pose risks. Despite these hurdles, the sector remains resilient and continues to drive inclusive economic development.
Digital financial services (DFS) remain underutilized due to policy gaps. Although mobile banking policies exist, there’s no tailored DFS policy for over 40 million MFI clients. The MRA also caps admission and loan processing fees at BDT 25, without clarifying who bears DFS costs. Furthermore, while over 284,000 people work in microfinance -74% being field staff, there is limited access to specialized education or training in microfinance management. Despite these hurdles, MFIs continue to show resilience.
Holiday Post: How do you perceive the impact of current government policies and regulations on the operations and sustainability of MFIs?
Imrul Kayes Muniruzzaman: The Government policies and regulations have significantly shaped the microfinance sector in Bangladesh. The establishment of the Microcredit Regulatory Authority (MRA) has enhanced oversight, transparency, and accountability, strengthening public trust and sector stability.
However, certain regulatory provisions – such as interest rate caps, reserve requirements, and strict reporting standardscan restrict operational flexibility, especially for smaller MFIs with limited capacity. Additionally, MFIs are often excluded from broader financial sector development initiatives and policy dialogues, which limits their integration with national planning and digital financial systems. Greater collaboration between the government, MRA, and MFIs could make policies more responsive and supportive.
Holiday Post: What specific policy adjustments or new initiatives do you believe could be most effective in supporting the growth and effectiveness of the microfinance sector?
Imrul Kayes Muniruzzaman: To enhance the growth and effectiveness of the microfinance sector, several regulatory adjustments and new initiatives are needed. Key policy recommendations include:
Regulatory Reforms: Allow broader access to voluntary and term deposits, develop MFI-specific policies under the central bank, reduce bank loan interest rates and fixed deposit requirements, and relax MRA conditions for accessing capital markets.
Digital Finance: Clarify who bears the cost of digital financial services (DFS) and promote its wider use among MFI clients.
Governance and Review: Establish a high-level technical team within MRA to regularly review and update regulations every 3–4 years, ensuring alignment with sectoral realities.
Capacity Building: Introduce structured training programs for microfinance staff and develop a pool of financial analysts. Integrate microfinance studies into college and university curricul.
Knowledge and Data: Create a centralized digital database of MFIs and establish a collaborative platform involving MFIs, research institutions, and universities to ensure data sharing and regular sectoral updates.
Such progressive measures can unlock the full potential of microfinance in promoting inclusive growth, reducing poverty, and contributing to Bangladesh’s sustainable development goals.
Holiday Post: Given the global economic climate and Bangladesh’s aspirations for development, how can the microfinance sector contribute most effectively to achieving the Sustainable Development Goals (SDGs) by 2041 and to broader economic progress?
Imrul Kayes Muniruzzaman: The microfinance sector in Bangladesh is well-positioned to drive progress toward the Sustainable Development Goals (SDGs) by promoting inclusive growth, reducing poverty, and empowering marginalized communities.
SDGs 1 – Poverty Reduction: Microfinance enables low-income individuals, especially in rural areas, to start and sustain small businesses, reducing reliance on informal lenders and improving livelihoods.
SDG s 3 & 4 – Health & Education: MFIs increasingly offer financial tools like school loans and micro-health insurance, improving access to essential services.
SDGs 5 – Gender Equality: With women comprising the majority of borrowers, MFIs advance women’s economic empowerment, which positively impacts household health, education, and decision-making.
SDGs 8 – Decent Work & Economic Growth: By financing microenterprises, MFIs support job creation and entrepreneurship—vital for Bangladesh’s informal sector, where 5% of borrowers annually graduate into SMEs.
SDGs 9 & 10 – Infrastructure & Reduced Inequality: Digital microfinance and FinTech tools expand financial access to underserved regions, promoting equity and inclusion.
SDGs 13 – Climate Action: Through green finance and recovery loans, MFIs help communities adopt climate-resilient practices and bounce back from environmental shocks;
To maximize impact by 2041, MFIs must align with national SDG strategies, foster cross-sector partnerships, and embrace innovation while maintaining client focus. With sustained policy support, microfinance can be a powerful engine for equitable and resilient development in Bangladesh.
Holiday Post: What innovations or adaptations are necessary for MFIs to remain relevant and effective in a rapidly changing economic and social landscape? Could you provide some specific examples?
Imrul Kayes Muniruzzaman: To stay relevant in a rapidly changing economic and social landscape, microfinance institutions (MFIs) in Bangladesh must embrace innovation and adapt strategically. Key areas include:
Digital Financial Services (DFS): Mobile-based loan disbursement, repayments, and savings reduce operational costs and expand reach.
Example: BRAC, BURO, and RDRS Bangladesh have adopted mobile wallets and app-based platforms, improving efficiency and transparency.
Data-Driven Decisions: Using analytics for credit scoring, client profiling, and risk management helps MFIs tailor services.
Example: RDRS Bangladesh uses the Power system to assess borrower behavior before SME loan approval.
Product Diversification: Expanding into micro-insurance, WASH loans, education finance, green loans, and climate-resilient products meets evolving client needs;
Example: PKSF offers climate-adaptive agri-loans and WASH finance; RDRS has introduced similar products under ECCCP-Drought.
Client-Centric Design: Flexible repayment, emergency loans, and need-based services increase trust and usability.
Tech-Driven Capacity Building: E-learning and digital tools for staff training enhance adaptability and compliance.
Strategic Partnerships: Collaborating with fintech firms, mobile operators, and development agencies strengthens innovation and digital inclusion.
By becoming digitally enabled, client-focused, and impact-oriented, MFIs can continue to drive financial inclusion and support socio-economic progress in Bangladesh.
Holiday Post: How are you incorporating sustainability and responsible lending practices into your organization’s core mission, and how do you measure the impact of these efforts?
Imrul Kayes Muniruzzaman: Sustainability and responsible lending are integral to our mission of inclusive, long-term development. We aim to empower clients without causing over-indebtedness, while promoting positive environmental and social outcomes.
Responsible Lending Practices: We enforce strict client protection policies, including transparent communication, affordability assessments, and grievance redress systems. Field staff are trained to avoid over-lending and ensure clients fully understand loan terms;
Social Performance Management (SPM): We track client well-being, income growth, and repayment behavior using Social Performance Indicators. Periodic client satisfaction surveys help us improve service quality and assess social impact;
Environmental Focus: Through green loans and training, we promote climate-smart agriculture and sustainable livelihoods, particularly in vulnerable regions;
Gender and Inclusion: Over 93% of our clients are women. We focus on marginalized groups, smallholder farmers, and youth entrepreneurs, contributing to equitable economic growth;
Measuring Impact: We assess outcomes through: Pre- and post-loan evaluations; Client case studies; Portfolio quality metrics (e.g., PAR); Third-party impact assessments with development partners
These efforts ensure our services remain not only financially viable but also socially and environmentally responsible. By embedding these practices into our operations, we position ourselves as a catalyst for sustainable development.
Holiday Post: Looking ahead, what are the most important long-term strategies and priorities for ensuring the sustainability and continued success of the microfinance sector in Bangladesh?
Imrul Kayes Muniruzzaman: Ensuring the long-term sustainability and success of the microfinance sector in Bangladesh requires a strategic focus on innovation, inclusion, and institutional resilience. Key priorities include:
Digital Transformation: Embracing mobile banking, digital credit scoring, and data analytics can enhance outreach, reduce costs, and improve operational efficiency;
Regulatory Balance: A supportive regulatory environment is crucial—one that safeguards clients from over-indebtedness while allowing MFIs flexibility to innovate and grow;
Inclusive and Responsible Finance: Client-centric services that are transparent and tailored to marginalized populations—especially women, youth, and climate-affected communities—must remain central;
Product Diversification: Expanding beyond traditional loans to include savings, insurance, education and health loans, and livelihood support builds client resilience and deepens financial inclusion; Capacity Development: Ongoing staff training and leadership development are essential for strong governance and service quality;
Strategic Partnerships: Collaborations with government, fintech, development partners, and the private sector can accelerate innovation and scale impact;
Impact Measurement: Robust monitoring systems and data use enable continuous learning, accountability, and evidence-based decision-making;
Climate Resilience Integration: Incorporating green finance and climate-smart products will position MFIs as key players in supporting vulnerable communities through adaptation;
In essence, the future of microfinance in Bangladesh lies in becoming digitally enabled, socially responsible, and strategically aligned with national and global development priorities.
Holiday Post: Based on your experience and expertise, what advice would you offer to other leaders in the microfinance sector to help them navigate current challenges and achieve their missions?
Imrul Kayes Muniruzzaman: Based on my experience in the microfinance sector advice to fellow leaders navigating today’s complex challenges:
Stay Mission-Focused: Microfinance is ultimately about transforming lives. Keep your organization’s social mission central to all decisions—especially during times of uncertainty.
Innovate Responsibly: Embrace technology for scale and efficiency, but ensure innovations are inclusive, ethical, and tailored to client realities.
Strengthen Risk Management: Prepare for external shocks—economic, climatic, or political—by diversifying portfolios, building reserves, and instituting robust risk systems.
Invest in Your People: Field staff are the backbone of your institution. Prioritize their well-being, build their skills, and equip them with tools to serve clients better.
Promote Strong Governance: Uphold transparency, ethical standards, and accountability. Trust and credibility stem from sound governance practices.
Collaborate for Impact: Engage with other MFIs, NGOs, and public agencies. Partnerships often yield greater innovation and reach than working in isolation.
Listen to Clients: Regular feedback from clients should shape products and strategies. Their needs and aspirations are the best guideposts.
Measure Real Impact: Go beyond financial metrics. Track and communicate social outcomes such as income growth, education access, and improved health.
Lead with Vision and Empathy: Successful leadership in this sector combines strategic foresight with compassion. Challenges are many, but so are opportunities;
By leading with purpose, adaptability, and integrity, we can help shape a resilient and impactful microfinance ecosystem for Bangladesh and beyond.
Holiday Post: Could you briefly share some key moments or experiences in your career that have significantly shaped your perspective on the role and potential of microfinance in Bangladesh?
Imrul Kayes Muniruzzaman: Over my 36-year journey in development, several experiences have profoundly shaped my belief in the transformative potential of microfinance in Bangladesh.
Grassroots Impact: Early in my career, I met a woman in a remote village who used a small loan to start a poultry farm. Within two years, she had repaid her loan, expanded her business, sent her children to school, and became a community leader. That moment showed me the power of microfinance to unlock human potential;
Resilience During Crises: The COVID-19 pandemic tested the entire sector. MFIs restructured loans, offered emergency support, and linked clients with safety nets. Witnessing clients rebound during this period reaffirmed my belief that microfinance builds not just livelihoods—but resilience and dignity.
Policy and Sector Engagement: Participating in policy dialogues and working with regulators deepened my understanding of the broader ecosystem. I came to appreciate that effective microfinance requires not just strong field operations, but also sound governance, enabling policies, and sustainable funding.
Innovating for Impact: Designing financial products for women entrepreneurs, smallholder farmers, and climate-affected populations has been deeply rewarding. These innovations reminded me that microfinance must evolve continuously to remain inclusive and impactful.
These experiences have strengthened my conviction that microfinance is more than a financial tool – it is a people-centered movement. When led with integrity, innovation, and empathy, it has the power to foster inclusion, restore hope, and drive lasting development.
