Holiday Post Report: Kazi Ashraful Hassan, the Founder and Executive Director of the Society Development Committee (SDC), has delivered a timely and pointed message for Bangladesh’s microfinance sector: evolve quickly—or risk becoming obsolete.

In an exclusive interview with The Weekly Holiday Post, Mr. Hassan shared his candid reflections on the sectors past successes, its growing vulnerabilities, and the critical reforms now required to remain relevant in a changing financial landscape. “It’s time we face reality,” he stated. “We cannot just celebrate our past glory. Without innovation, we risk becoming irrelevant. The microfinance model that helped millions in the past must now be re imagined for the future.”

He acknowledged the sector’s legacy. “Grameen Bank, BRAC, ASA—these institutions proved that the poor can and do repay loans. They empowered millions of rural women and brought real social change,” he said. “But now we are facing new challenges—client overlap, over-borrowing, and increasing operational pressures.”

Mr. Hassan warned that market saturation and rising borrower debt are serious threats. “Many clients are burdened with multiple loans. Some are falling into a cycle of debt. On the institutional side, microfinance organizations are under strain. Operational costs are rising, and many have not yet embraced digital transformation,” he added. “Rural branches are understaffed and under-skilled, and our financial margins are narrowing. This model is no longer sustainable.”

He also highlighted growing regulatory constraints. “The Microcredit Regulatory Authority has brought needed oversight, but also limitations. Interest rate caps and profit restrictions are tightening our room to maneuver,” he said. “We support the government’s push for financial inclusion and digitization, but MFIs need more flexibility to adapt and innovate.”

Mr. Hassan urged policy makers to create space for new ideas and partnerships. “We need regulatory reforms that allow MFIs to offer digital financial products, integrate fintech solutions, and access low-cost refinancing from the central bank,” he explained. “Public-private partnerships should be encouraged. Tax incentives could support institutions that demonstrate real social impact.”

Despite the challenges, Mr. Hassan emphasized that microfinance still holds transformative power. “We can directly contribute to achieving Sustainable Development Goals—ending poverty (SDG 1), empowering women (SDG 5), and promoting decent work (SDG 8),” he said. “Through green financing, we’re also contributing to climate resilience. We support solar home systems, improved cook stoves, and smart farming practices. The potential is huge.”

He pointed to emerging technologies as tools for progress. “AI-powered credit scoring is already being tested. Institutions like BRAC are using mobile platforms like bKash to disburse loans. ESG monitoring is gaining ground. Today, success is not measured in loan disbursement figures, but in meaningful changes in income, health, education, and empowerment.”

Mr. Hassan delivered a clear message to the sector: “This is the time to redefine what microfinance means. It’s no longer just about giving loans. It’s about providing insurance, savings, remittance services, and building climate resilience. We must invest in our people, build stronger risk management systems, and realign with our original mission. We cannot afford to chase profit at the cost of our values.”

He shared personal stories from his field visits. “I’ve met women in chars and haors who escaped extreme poverty and became entrepreneurs,” he recalled. “During the COVID-19 pandemic, we didn’t stop working—we maintained trust, piloted app-based lending, and built partnerships with global donors. We adapted, and we learned.”

In closing, he called on all stakeholders—MFIs, regulators, donors, and partners—to take shared responsibility. “Don’t over-lend. Invest in financial education. Partner with banks, fintechs, and NGOs. Be transparent. Focus on real, measurable impact. And above all, remember: our mission is to uplift lives, not exploit them.”

Kazi Ashraful Hassan’s message is both a warning and a vision. Microfinance has served Bangladesh well—but without bold changes, it could fall behind. His voice is one of both experience and urgency, reminding the sector of its roots, and challenging it to rise to meet the future.