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Public finance

Microfinance Sector Leaders Urge Government Support in National Budget 2025-26

Strategic Insights

— 1 min read

Microfinance sector leaders have requested the government to implement various budgetary measures in the upcoming National Budget 2025-26 to ensure the sector's sustainable financing. The measures include the establishment of a Tk 100 billion revolving Micro Loan Fund to support the sector's operations, simplified tax provisions, and grant funding for essential social development programs. The sector leaders also emphasized the importance of formal pre-budget consultations between the Ministry of Finance and microfinance institutions to ensure policy decisions reflect on-the-ground realities and sector needs.

Key Takeaways:

  • The microfinance sector leaders have urged the government to introduce a Tk 100 billion revolving Micro Loan Fund in the National Budget 2025-26 to ensure sustainable financing for the sector.
  • Simplified tax provisions and allocation of grant funding for essential social development programs are also being requested to support the sector's growth.
  • The sector leaders have emphasized the importance of institutionalizing formal pre-budget consultations between the Ministry of Finance and microfinance institutions to ensure policy decisions reflect on-the-ground realities and sector needs.
  • Dr. Mohammed Helal Uddin, Executive Vice Chairman of the Microcredit Regulatory Authority (MRA), has called on the sector to better quantify its contributions to support its social mission.
  • Asif Saleh, Executive Director of BRAC, has stressed the need to safeguard the social mission of microfinance institutions (MFIs) while moving towards financial sustainability.
  • The sector leaders have highlighted the importance of providing access to finance for underserved communities and have advocated for a practical funding strategy, including allowing large MFIs to mobilize savings to support smaller MFIs.

Statistics:

  • Tk 100 billion: the amount requested for the revolving Micro Loan Fund to support the microfinance sector's operations.
  • 2025-26: the National Budget year in which the sector leaders are requesting the implementation of a Tk 100 billion revolving Micro Loan Fund.
  • 50% of the sector's funding crisis: the amount that could be mitigated if large MFIs are allowed to mobilize savings to support smaller MFIs.
  • 100%: the percentage of the microfinance sector's operations that Dr. Mohammed Helal Uddin has emphasized should be quantifiable to support its social mission.

Sources:

  • "Microfinance Sector Consultations on National Budget 2025-26" statement by INAFI Bangladesh.
  • "Microfinance Sector on veratile crisis, but can play key roles: Experts" article by The Business Standard.
  • "Microfinance sector urges supportive budgetary measures in National Budget 2025-26" news article by Dhaka Tribune.

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