Microcredit Bank Ordinance 2025: Draft ordinance mandates borrowers own 60pc of shares

Business Report :

The interim government has taken an initiative to establish a “microcredit bank” in the country to institutionalise the “social business” model championed by Chief Adviser Professor Muhammad Yunus.

The bank will primarily provide loans to new micro-entrepreneurs and existing small enterprises designed to bypass conventional banking hurdles.

The body was formed on Thursday at a meeting at the Financial Institution Division (FID) with its secretary Nazma Mobarek in the chair, after many sections of the draft have been found to be inconsistent with various existing acts and laws, sources said.

Earlier, in May this year chief adviser Prof Muhammad Yunus at an event emphasized the need for establishment of microcredit banks to develop the rural and marginalized communities as entrepreneurs.

The body, headed by Sayed Kutub, an additional secretary at the FID, has been asked to submit its report by next 15 working days to FID secretary for the further advancement of the draft ordinance.
After the meeting, the committee head Mr Kutub told the media that the draft was at preliminary stage and the participants of the meeting found various inconsistencies in it.
Thus the meeting has decided to form a committee to make the draft consistent with the other existing acts, he said.
Earlier, the government drafted the Microcredit Bank Ordinance-2025 to establish a specialized bank for small entrepreneurs.
Officials said the microcredit bank has been planned to provide collateral-based and non-collateral based loans to small entrepreneurs.
According to the draft ordinance, 60 per cent ownership of microcredit banks will be held by the poor people.
The proposed microcredit bank will be able to collect deposits from the common people, it said, adding that the bank will operate as a social business enterprise for employment generation and alleviate poverty.
The bank will launch with an authorised capital of Tk300 crore, divided into shares with a face value of Tk100. The initial paid-up capital is set at Tk100 crore.
A seven-member board will oversee operations, featuring three directors elected by borrower-shareholders and three by other shareholders.
Senior officials of several large microcredit institutions have welcomed the government’s initiative.
However, some believe that the paid-up capital requirement of Tk 100 crore should be reduced.