Holiday Post: The microfinance institution (MFI) sector in Bangladesh is facing severel challenges, according to AKM Abu Jafar Siddique, Executive Director of Crescent, a nonprofit organization operating in the socio-economically disadvantaged southwestern coastal region. Of the approximately 700 certified MFIs in the country, only around 100 have established themselves as sustainable, while the majority are struggling due to a chronic fund crisis.

Crescent, founded in 2002 as a socially driven nonprofit, has been a beacon of hope for underserved communities. Through partnerships with the government, local stakeholders, and development organizations, Crescent has focused on empowering grassroots volunteers and illuminating the path to social progress. However, the region’s vulnerabilities—exacerbated by climate change and natural disasters—continue to pose formidable obstacles to sustained development.

Siddique expressed concern about the precarious economic conditions of the region’s inhabitants, who face job scarcity, minimal industrialization, and declining agricultural productivity. Factors like increased salinity, land degradation caused by shrimp farming, and limited access to modern agricultural technologies are contributing to stagnation in the farming sector. These challenges, coupled with population growth, have rendered many communities socioeconomically stagnant.

He highlighted a troubling backdrop of illiteracy, social irregularities, and frequent human rights violations, worsened by inadequate governance systems. Despite these challenges, Crescent has focused on involving ordinary villagers in economic activities through microcredit, fostering entrepreneurship, and supporting disadvantaged groups. By building institutions for target communities, the organization aims to enhance capacity and promote grassroots ownership.

However, Siddique critiqued the current policies surrounding microfinance, emphasizing the need for reforms. He advocated for a model where small MFIs could act as conduits for distributing agricultural loans from banks, thereby enhancing access to finance for small businesses. He also stressed the importance of training programs to equip entrepreneurs with the skills necessary for economic resilience and growth.

As Crescent continues its mission, Siddique envisions a development framework that integrates financial inclusion with capacity-building initiatives, fostering long-term sustainability for Bangladesh’s underserved regions.